TSEM9820 - Property held jointly by married couples or civil partners: The 50/50 rule: Income from furnished holiday lettings

Up to 5 April 2025, the 50/50 rule does not apply to income arising from a UK property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation.

1. If a spouse or civil partner carries on the activity alone: that spouse or civil partner is taxable on the income.

2. If a spouse or civil partner carries on the activity with others: the income is split for tax purposes in the way the parties have agreed to split the profits amongst themselves.

From 6 April 2025, the exceptions D and DA of s836(3) ITA 2007 have been withdrawn and the 50:50 default position applies. Any change to the default position will require a declaration on Form17, under s837 ITA2007.

A declaration under s837 allows joint property income to be split unequally between spouses provided that:

• the underlying ownership of the property is in fact unequal between the married joint owners.

• the income allocation follows that same unequal ownership split; and

• a Form 17 declaration has been validly made.