Income Tax Act 2007 section 836

Jointly held property

Section 836 establishes the general rule that income arising from property jointly held by a married couple or civil partners who live together is treated as split equally between them for income tax purposes, subject to a number of important exceptions.

• Income from jointly held property is automatically split 50:50 between spouses or civil partners who live together — regardless of actual ownership shares.
• The 50:50 rule does not apply where neither spouse is beneficially entitled to the income, for example where they hold the property as nominees or trustees.
• Couples who own property in unequal shares can override the 50:50 split by making a formal declaration of their actual beneficial interests under section 837, or where income arises from partnership activities.
• Distributions from shares or securities in a close company are always taxed according to true beneficial ownership, not the 50:50 default, and income already treated as belonging to the other spouse or a third party under other tax rules is also excluded.