Why the split matters more from April 2027
The Budget on 28 October 2026 set the tax on rental profit at 24%, 44% and 49% from April 2027. That's four points more than tax on wages. The personal allowance is also set against wages and pensions first, so rental profit is more likely to land in a higher band. If one of you pays 44% and the other 24%, every £1,000 of profit moved to the lower earner saves about £200, less the change in the mortgage interest credit.
How couples are taxed on rent they own together
- Married couples and civil partners who live together are taxed 50:50 on jointly owned property by default, whatever the deeds say.
- To be taxed on a different split, you must really own it in those shares, usually as tenants in common with a declaration of trust, and send HMRC Form 17 within 60 days of the declaration. It only applies from the date of the declaration, not before.
- Unmarried couples are taxed on what each of you actually owns, or on a different split you have agreed. Form 17 isn't needed.
- Mortgage interest follows the same split, so each of you gets the 24% credit on your share.
Worked example
One partner earns £60,000 and the other £20,000. They own a rental 50:50, with £20,000 of profit before £8,000 of mortgage interest. In 2027/28 they'd pay £4,880 in tax on it between them. Moving to 1:99, with almost all of it owned by the lower earner, cuts that to £2,920: a saving of £1,960 a year, or nearly £10,000 over five years.
Before you change the ownership
- It's a real gift. The person with the bigger share owns more of the property and gets more of the money when it's sold. That matters if the relationship ends.
- Capital gains tax. Transfers between spouses and civil partners living together are free of CGT, and the receiving partner takes on the original cost. Unmarried couples may pay CGT on the transfer.
- Stamp duty. If your partner takes on part of the mortgage, that share of the debt can count as a price paid, so stamp duty may be due on a large mortgage.
- Your lender. Tell your lender, and check whether a change on the title needs their consent.
- Costs. A solicitor typically charges a few hundred pounds to £1,000 for a declaration of trust. Compare that with the saving above.
If the higher earner would still pay 44% on a lot of rental profit, compare owning through a company with the limited company calculator. For everything the Budget changed, see Budget 2026 for landlords.
Questions landlords ask
What is Form 17?
A declaration to HMRC that a married couple or civil partners own a property in unequal shares, so each is taxed on their real share of the income instead of 50:50. It must reach HMRC within 60 days of the date of your declaration of trust, and it can't be backdated.
Can we split rental income 90:10?
Yes, if you really own the property in those shares. Married couples and civil partners need a declaration of trust and Form 17. Unmarried couples are taxed on what each of you owns or on a split you have agreed.
Does changing ownership between spouses trigger capital gains tax?
No. Transfers between spouses and civil partners who live together are treated as no gain and no loss, and the receiving partner takes on the original cost. Stamp duty can be due if they take on part of the mortgage.
How much tax can we save by splitting rental income?
If one of you pays the 44% property higher rate and the other has room in the 24% basic band, about £200 for every £1,000 of profit moved, less the change in the mortgage interest credit. The calculator works it out for your figures.
Sources
- GOV.UK: Declare beneficial interests in joint property and income (Form 17)
- HMRC manual: property held jointly by married couples or civil partners (TSEM9800)
- GOV.UK: Budget 2026 overview of tax legislation and rates (OOTLAR)
Last updated 13 November 2026.