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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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The 50/50 rule - asset first put into joint names

Income from property is split 50/50 from the date it is put into joint names.

Example 1 - all income arises after the property is put into joint names

John held a building society account in his own name before he got married on 3 June 2010. From 8 June 2010 the account is held in joint names with his wife. Interest arises on the following dates

30 June 2010 £500
   
31 December 2010 £600
Total £1,100

All the interest arose after 7 June 2010; so the total interest for 2010-11 is split 50/50 between the couple.

Example 2 - income arises before and after the property is put into joint names

Jackie held a building society account in her own name before she formed a civil partnership by registration on 15 September 2010. From 20 September 2010 the account is held in joint names with her civil partner Karen. Interest arises on the following dates

30 June 2010 £500
   
31 December 2010 £600

Jackie is taxed on all the income that arises up to 19 September 2010 and on half the income that arises thereafter. That is

        £
         
500       500
600 x 50% = 300
Total       800

Karen is taxed on half the income that arises from 20 September 2010. That is, £600 x 50% = £300.

Between them the couple are taxed on all the income that arises in 2010-11; that is, £800 + £300 = £1,100.