TSEM9828 - 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 2020. From 8 June 2020 the account is held in joint names with his spouse. Interest arises on the following dates

Date interest arises	Amount
30 June 2020	£500
31 December 2020	£600
Total	£1,100

All the interest arose after 7 June 2020; so the total interest for 2020-21 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 2020. From 20 September 2020 the account is held in joint names with her civil partner Karen. Interest arises on the following dates

Interest arising dates	Amount
30 June 2020	£500
31 December 2020	£600

Jackie is taxed on all the income that arises up to 19 September 2020 and on half the income that arises thereafter. That is

Interest	Percentage	Amount
500	100%	£500
600	50%	£300
Total	-	£800

Karen is taxed on half the income that arises from 20 September 2020. That is, £600 x 50% = £300.

Between them the couple are taxed on all the income that arises in 2020-21; that is, £800 + £300 = £1,100.