Existing Declaration of Trust with submitted Form 17 and subsequent btl purchase

[madmum]

Hi everyone, can you answer the following questions ? I am asking because we have bought a second btl property four months ago which has yet to be let and realistically wont be this tax year so mortgage interest payments and council tax and various other bills are mounting up. The first property we bought jointly but have Declaration of Trust with Form 17 in place such that I beneficially own 99% and DH 1%. We haven't done a declaration of trust or form 17 for the second property at all but intend to for when it is eventually rented. So how to split the costs for the second property? 99% 1 % or 50/50 ?

a, so if already have a jointly owned btl property and you buy another. Does whatever split you had with the first one automatically apply to the second and indeed subsequent properties?

b, from the 1st April we would like to change the split for all properties slightly to 90% 10% ready for when we do let the second property. Will it be ok to inform the HMRC then of the existence of the second property and the new split ? or should we do two lots of declaration of trusts (now for the 99% 1% backdated to as far as we can and one for the new split for 1st April) ?

Your help much appreciated by this Mad Mum

[AndrewDod]

Simple answer

- each property is separate.
- You cannot backdate (either the actual deed of trust, or -- except within very narrow limits - the F17 declaration)
- The default if there is no deed of trust and no F17 is 50:50

[madmum]

Thank you AndrewDod, very grateful.
DH having 1% of the existing BTL income and 50% of the second BTL costs without any income would mean a loss for him in this tax year against future property income profits and trigger potential problems as he likes to max out his pension contributions. Looks like I have calculations to do before he makes the March pension contribution. Do you know how narrow the limits for back dating the DoT and F17? I think we should backdate it as far as possible.

[madmum]

A subsequent question, moving forward could we then have our first btl property at the 99% 1% existing arrangements and the new one 50/50 indefinitely? I always thought obviously incorrectly all the houses in a btl business would have to have the same split and treatment for tax purposes. Is making each one an individual basis for taxation purposes the norm?

[jpkeates]

It depends on what the deed and form 17 say.
Normally they're specific to a property, but I don't see why they have to be.

You can't backdate a deed or form 17 at all.