Taxation Of Jointly Owned Rental Properties Explained

Whether it’s with a partner, family member or close friend, jointly owning a rental property can be a reliable source of income. However, paying tax for joint-owned properties is complicated. All the rental income you both…

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Last Updated: 5th April 2023

Whether it’s with a partner, family member or close friend, jointly owning a rental property can be a reliable source of income. However, paying tax for joint-owned properties is complicated. All the rental income you both earn has to be reported to HMRC, and there are a few considerations you’ll need to make before you start. They include:

  • How much Income Tax each of you will pay
  • The share in the property you each have
  • How Capital Gains Tax will be applied
  • What to do in the event of a separation

So, to ensure you both enjoy the benefits of ownership (and to help avoid any disagreements) we’ve provided the below guide on the taxation of jointly owned properties.


The amount of tax you pay will be determined by your share of the income. Generally, ownership is deemed to be in equal shares – so it would be 50/50 if there were two owners.

That is unless you have a specific reason for wanting to change the share of the income – in which case, you’ll need to provide evidence that your beneficial interests in the property aren’t equal. This could be because of a declaration or deed, for example.

You will need to declare beneficial interests in joint property and income by filing a Form 17 declaration. This is the only way you can change the split from 50/50 if you are either a married couple or in a civil partnership.

That 50% of the profit will be added to your total income for the year. And so, provided you exceed your £12,570 Personal Allowance, it will be taxed according to the band you fall into. As of 2023/24, the tax bands are as follows:

BandTaxable income    Tax rate
Personal Allowance   Up to £12,5700%
Basic rate £12,571 to £50,27020%
Higher rate£50,271 to £125,14040%
Additional rateOver £125,140


Capital Gains Tax is tax on the profit you make when selling an asset. While some assets are tax-free, a home you’ve rented out for profit is not. To work out what you owe, in its simplest form, you need to subtract the purchase price, associated costs and costs of selling from the sale proceeds.

You will need to report on gains through your Self Assessment tax return. It is worth noting that the first £6,000 of any gain is covered by the Capital Gains Tax allowance, so no tax will be payable on this. There are also some additional allowances, such as Principal Private Residence Relief and Letting Relief, that may reduce your Capital Gains Tax further if the property was your main residence at any time.

Remember, rental income is a form of personal income that you will need to declare to HMRC. If this is new to you as you have always worked under PAYE, then both you and your co-owner will need to register for Self Assessment. This is how HMRC works out your Income Tax bill.


This largely depends on the relationship with your former co-owner. You can always sell the property and separately pay the Capital Gains Tax mentioned above, or you can continue to benefit from the split rental income. There’s no need for the share of income to change unless there is suddenly a change in the beneficial interests of either partner.

When it comes to paying tax, there should be no difference in what you owe unless your circumstances change. This is why the financial benefits of co-owning rental property remain true, provided you can evenly manage the responsibility of both the property and tenants.


Whatever the circumstances, GoSimpleTax makes recording rental income taxed on jointly owned properties even easier. Income and expenditure can be logged on our software to automatically work out your tax bill. This means you can determine the amount of Income Tax you’ll pay in real time, keeping you aware of your potential tax bill.

Better yet, we highlight any tax relief you may be able to claim in order to lower your tax liability and maximise your take-home pay. When you upgrade, you can even submit your complete Self Assessment tax return directly to HMRC.

You can sign up for a freemium account and start streamlining your Self Assessment process today.

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Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.

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