IN125 - General: ICTA88 S282A

The 50:50 rule 

Investment income from property held in joint names is split 50:50 when a married couple or civil partners of each other live together.

The 50:50 rule does not apply

• to income from a partnership; IN127 has more details
• from 6 April 2004, to income arising from jointly held shares in a close company; IN129 has more details
• where a married couple or civil partners are separated for tax purposes; in that case you tax a separated spouse or civil partner on their actual entitlement to income; IN346 sets out the factors that will enable you to decide when a couple live together for tax purposes
• where property is held in the name of only one spouse or civil partner; if the property is held in one spouse's/civil partner's name, but the taxpayer claims that the property is owned by the other spouse/civil partner or by both spouses/civil partners, submit the case to HMRC Trusts Head Office Edinburgh.
• where a husband and wife or civil partners are entitled to property and the income from it, but the property is held in the name of a nominee (for example a bank); in these circumstances the split of the income follows the entitlement of each spouse or civil partner to the income.
• where neither spouse/civil partner is entitled to any income from the property; for example, where they hold it as trustees so that the income belongs to the beneficiaries of the trust and neither spouse/civil partner is a beneficiary.
• where the couple do not hold 50:50 shares in the property and the income and they want to be assessed on their actual entitlement; IN140 onwards tells you when and how the couple can opt for actual treatment
• where some other legislation has provided a different split; for example, the Settlements legislation in Chapter 5 Part 5 ITTOIA may provide another allocation.

Submit any problems on the above categories to HMRC Trusts Head Office Edinburgh. In addition,

• if the property is held in joint names but the taxpayer claims that the property is actually owned wholly by one spouse/civil partner who is incapacitated, submit the case to HMRC Trusts Head Office Edinburgh.