Using a Form 17 to reduce income tax

Usually where a married couple (or civil partners) own a property jointly any investment income from that property is split equally. If one spouse is a basic rate taxpayer, and the other is a higher rate taxpayer this may not be advantageous. A form 17 can allow you to split the ownership for tax purposes. The declaration on form 17 sets out the beneficial ownership percentages and would ensure that each spouse was taxed on that basis. You could therefore allow 99% of the income to be taxed on your spouse with only 1% on you (eg if you were a higher rate taxpayer and your spouse wasn't). Note though that this would only apply where the beneficial interests in the property actually were 99/1 (eg your spouse received 99% of the rental income etc). Once a declaration on form 17 is made it remains in force until the interests in the capital or income change. Using a form 17 is therefore an alternative to having to split the legal interest in an asset. It's therefore a popular way to split the taxable income from properties and financial investments (eg bank accounts).