My partner and myself jointly own a property. However, my partner pays the mortgage and receives the rental income, and we therefore declare this only on his tax return on which he pays income tax at 40%. However, I am on maternity leave and as my income is greatly reduced I was wondering if we can change the mortgage payments and income over to my account for the remainder of this tax year to reduce our tax liability? We are also getting married next year, and I note from the tax return that spouses should declare property income 50:50. Is there a way around this, as there are two other houses which are in both of our names? If these were declared 50:50 my partner’s share would be taxed at 40%.

Arthur Weller replies:
According to HMRC’s Property Income manual at www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1030, you can change the income from being received by your partner, to being received by you. However, as for the mortgage payments, this depends on who is responsible for the mortgage. If you are jointly responsible, each one of you should claim 50% of the mortgage expense, unless you renegotiate with the mortgage lender to change responsibility for the mortgage. With regard to getting married, there is a way around the income being received 50:50. After marriage, your husband could transfer some or all of his share of the house to you, and if you follow this up with a Form 17 to HMRC (per the rules in www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estatesmanual/tsem9800), you will be taxed according to the new proportion of ownership.