Commentary on Sections Relevance of “earned income” Section 836: Jointly held property
2519.This section provides the general rule (the 50:50 rule) that income from jointly held property is allocated equally between the spouses or civil partners. It is based on section 282A of ICTA.
2520.Subsection (1) explains that the section applies to married couples and civil partners provided that they live together. The meaning of “living together” is explained in section 1011.
2521.Subsection (2)gives the general rule and subsection (3) provides exceptions.
2522.Exception A relates to income to which neither of the individuals is beneficially entitled. It follows that the 50:50 rule does not apply when the couple hold the property as nominees or trustees.
2523.Exception B applies where the couple own property in common in unequal shares and make a declaration under section 837.
2524.Exception C applies to all income that arises to the individuals as partners. This exception covers not only income arising from a trade or profession carried on in partnership, but any other business income arising to a firm. See Change 125 in Annex 1 and the overview commentary on this Chapter.
2525.Exception D applies to the commercial letting of furnished holiday accommodation, which is treated as a trade. See Change 125 in Annex 1 and the overview commentary on this Chapter.
2526.Exception E is based on section 282A(4A) of ICTA. It ensures that if close company shares or securities are held in common, income arising from that property is allocated according to true beneficial ownership rather than equally.
2527.Exception F ensures that the rule in subsection (2) does not apply to income that is treated as the income of the other individual or a third party under any other provision of the Income Tax Acts.