Writing in Landlord Today, Peter Ball, Tax Partner at Bishop Fleming warns that from 6 April, married or civil-partnered owners of Furnished Holiday Lets will lose the flexibility to allocate profits and losses as they choose. Instead, profits and losses will default to a 50/50 split unless action is taken before the tax year ends.

To maintain a different split, owners must:

1. Ensure they own the property as tenants in common rather than jointly. If not, they must ‘sever’ the joint tenancy.

2. Adjust ownership proportions (e.g., 70/30) with legal documentation.

3. Notify HMRC using form 17 within 60 days of the ownership change for it to take effect from the original date.

If planning is completed by 5 April, the form can be submitted by early June to apply from 5 April.

Additionally, those restructuring ownership should consider potential stamp duty costs if there is a mortgage involved, as transfers between spouses can trigger stamp duty liabilities.

The original article can be read here