HMRC Trusts & Estates has published new guidance on the taxation of income from property. The guidance can be found in the Trusts, Settlements & Estates Manual (TSEM) at TSEM9000 to 9978.
TSEM9000 - Ownership and Income Tax
Most of this guidance is brand new and has not featured previously in a HMRC manual. It covers the taxation of rental income, bank and building society interest and dividends. It provides legal background to the subject of ownership of property, and includes guidance on express and implied trusts. It also gives examples illustrating the principles of ownership and joint ownership in the context of taxation of income.
Part of the guidance in the section TSEM9800 to 9874 - Property held jointly by married couples or civil partners - replaces and updates guidance in the Independent Taxation Manual (IN) at IN115-144. This will be withdrawn later this year along with the rest of the IN. Only TSEM9800 to 9874 should now be used.
The update of this guidance has meant that form '17 - Declaration of beneficial interests in joint property and income' has also been updated. The new form is now available on the HMRC website from the link below. The guidance and form both state that evidence of beneficial interest must be submitted along with any form 17 declaration. Previously HMRC had asked for evidence only in the case of bank and building society interest. The evidence requirement now applies to declarations in respect of all types of property.
Form 17 Declaration of beneficial interests in joint property and income
