Renting Out Your Former Home? What Joint Owners Need to Know About the Let Property Campaign

Moving in with a partner or buying a new place together often leaves you with a former home. Instead of selling it straight away, renting it out seems like a practical way to earn extra income. But when two people own a property jointly,managing the tax side can quickly get confusing. Many joint owners wrongly assume that declaring rental income is an optional extra or that one person can handle all the paperwork.

Missing out on declaring rental income from a joint venture property for previous years is not a good course to pursue. With professional Let Property Campaign assistance in London, both parties can declare their tax history voluntarily with no fear of penalty.

So, what exactly do joint owners need to know about setting things right with HMRC? Let us look at how it works.

1. Income Split Follows Ownership Shares

Based on UK taxation laws, rental income and expenses associated with joint properties should automatically be split equally between the two parties, which means 50/50 between spouses/civil partners. If the property is held by you and another person with different shares, such as 60/40, then the income should be split according to your actual shares.

Both owners must calculate their share of the net profit individually. You cannot simply allocate all the rental income to the person in a lower tax bracket to save money, unless you submit a formal legal declaration (Form 17) to HMRC beforehand.

2. Each Owner Needs an Individual Disclosure

When using the Let Property Campaign to report past undeclared rent, HMRC does not accept a single joint disclosure for the property. Because every individual has their own personal tax position, allowances, and tax bands, each joint owner must make an independent voluntary disclosure.

It implies that both parties have to file for the income earned in the form of rental profits, the tax due on the basis of the profit, and a separate disclosure form. A lack of coordination in the filing will lead to one of the owners being flagged by HMRC and not the other.

3. Claiming Your Individual Allowable Expenses

The good news is that both joint owners can claim deductions in their expenses. This includes repairs, safety certificates, agent’s fees, and insurance.

However, each owner must ensure they are only claiming their proportionate share of those costs. For instance, if you pay for a plumber out of a joint account, that cost is divided equally between both of your separate calculations.

Staying Compliant Moving Forward

The process of sorting out past tax avoidance may be intimidating, but dealing with late rental income is much easier than trying to fix it later. The same way a self-employed individual sorts their tax needs together with other requirements, such as a CIS tax return in the UK, one needs to sort out their personal tax needs to avoid costly surprises later on.

At Wingate Accountants Ltd, we regularly assist joint property owners in coming forward voluntarily, recalculating historic figures, and structuring their disclosures cleanly. If you need support reviewing your rental history, get in touch with Wingate Accountants Ltd today to get your tax matters fully resolved.