IN127 - Solely held sources and income that is earned

There is no special difficulty about deciding what amount to assess on a spouse or civil partner where he or she is the sole owner of a source. Nor is there any difficulty where employment income or income from a trade or profession is concerned. In these cases the position is as follows.

• Employment or pension income: only one spouse or civil partner will hold a particular office or employment or be entitled to a pension.
• Trading or professional income sources: there are two possibilities

• • a spouse or civil partner is a sole trader: in this case it is clear who is assessable, namely, the spouse or civil partner who carries on the trade
  • a spouse or civil partner is in partnership: in this case the allocation of the partnership trading or professional income is decided in the normal way by the partnership agreement; this applies to partnerships between husband and wife and between civil partners of each other as well as partnerships where others are involved (but in certain circumstance we may consider applying the Settlements legislation, see TSEM4215).

• Income from furnished holiday lettings: there are two possibilities

• • a spouse or civil partner carries on the activity alone: that spouse or civil partner is assessed
  • a spouse or civil partner carries on the activity with others: you split the income for tax purposes in the way the parties have agreed to split the profits amongst themselves.