For all property apart from jointly held bank accounts and
building society accounts (see IN154), you should normally accept
what the couple tell you on the declaration. Do not ask about the
nature of each spouse's/civil partner's interest or seek to verify
that the interests in property and income are the same. This is an
extremely complex subject and enquiries will not normally be worth
making.
Two factors should tend to reduce the scope for avoidance.
First, the fact that a declaration is not retrospective; it applies
only to income that arises from the date a valid declaration is
signed. Second, the fact that the declaration must be sent to the
Inspector within 60 days of the date it is signed (IN156). This
means that a couple will usually need to make a decision about a
declaration before they know their overall tax position for the
year.
However, submit the case to HMRC Trusts Head Office Edinburgh
where an Inspector considers that a couple have manipulated
declarations; for example, a couple frequently declare large
changes in splits with the effect of maximising the use of
allowances, reliefs or losses in order to save a substantial amount
of tax. For this purpose `a substantial amount of tax' means an
amount of tax that is more than half the basic Personal Allowance
for the tax year concerned.
