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  • Tax

    Is form 17 needed?

    Myself and the wife has tenancy in common with a declaration of trust. Do we need to submit form 17 to HMRC? My accountant who is also a property investor do not think we need to. He said as long as you could show the Declaration of Trust during any tax investigation, that would be good enough.

    What is others experience of splitting unequal shares in property?

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    If you don't own the property 50:50 and you wish to split the income in accordance with % ownership then yes a form 17 is needed.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Wondered why my accountant thought that is not necessary. When do I have to submit form 17?

    Thanks


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    Any time but effective from date signed only if submitted within 60 days of that date.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Would that also apply to a deed of trust with 5 equal stakeholders?

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    Would say no but would need more info.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    My wife's nephew bought a house on a residential mortgage in his name last year to provide accommodation for his father who has previously lived out of the UK but has been in poor health. The nephew's siblings all have contributed and signed a deed of trust recognising that all have  have equally contributed to this venture. The father moved in and his son commuted to London for his work for part of the week but after some months their father was hospitalised for 4 months and thereafter resumed residence of the property.  His health has subsequently deteriorated to the extent he will shortly move back to the rest of the family  in Europe. Further his son has been promoted requiring daily attendance and therefore has been living in London rather than commute. The house is now surplus to requirements and will be sold. There is an idea to let the property as there has been extensive work done or maybe just sell. However a current sale will create a significant CGT liability. The days the son has lived in the property are less than the time he stayed with his girlfriend in London. His concern is the possibility of CGT being applied. As his siblings are jointly owners as far as all are concerned and having mutually signed a deed of trust can they all apply their CGT exemption to the gain?

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    Yes indeed they can. They have a deed showing each as a 20% beneficial owner and therefore each will declare 20% of the gain.

    Form 17 not relevant to this.

    Deb

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Thanks, it is what I thought but had been concerned that the lawyer concerned said registering the deed was not required seemed a little odd.

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    I'm not a Solicitor but my understanding is that the deed need only be registered at Land Regisrty in order to put a restriction on sale.

    Deb

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Don't forget the new trust rules that have come in, all trusts now have to be registered with HMRC under the Trust Registration Service. Believe me its a real hassle.

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