Married Couple Savings Tax Saving Tip

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Comments

  • DiggingOut
    DiggingOut Posts: 770 Forumite
    All the money doesn't go away. Not sure all the rules, but some of it might go into children's name, etc. In any event, it could tie things up pretty badly for a while.

    If you put all the savings in one person's name, get a will done. It doesn't cost a lot, and it is well worth it.

    The last thing anyone needs when they lose a spouse is legal/financial hassles because there was no will. If you love your spouse, get it done.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • Aark
    Aark Posts: 247 Forumite
    If you made a declaration that the account was held 100% Mrs. and 0% Mr. wouldn't that now be a solely held account anyway?

    You could say 99% and 1%, but that is still saying that only 1% of the balance belongs to Mr.
  • ashleyhouse
    ashleyhouse Posts: 6 Forumite
    i know there's no such thing as a stupid question, but i think this one is!
    If my tax code is 359L and my wife's is 474L, which of us has the higher tax rate?
    In other words, who's name should i save in?
    How much will we gain from this by the way?
    And why have we got different codes in the first place ??!!

    Thanks
  • johnllew
    johnllew Posts: 1,928 Forumite
    Here's where the Inland Revenue tell you how they deal with jointly held property including making a declaration on how the share of the asset is to be split.
  • Robert_Sterling_3
    Robert_Sterling_3 Posts: 7,112 Forumite
    ...and here is the little known Form 17 ...
    ...............................I have put my clock back....... Kcolc ym
  • Aark
    Aark Posts: 247 Forumite
    This is what the Inland Revenue guidance says about joint bank accounts (from link posted by johnllew - you need to go to the next page a couple of times, or http://www.inlandrevenue.gov.uk/manuals/inmanual/html/In0145/04_0008_IN154.htm)
    Independent Taxation Manual - IN154

    Jointly held property: Approach to declarations about bank accounts and building society accounts

    All bank accounts and building society accounts held jointly by married couples in the UK are held by them as joint owners. In such accounts each owner is equally entitled to the whole account, and any income from it is paid to both parties jointly. The property is not held in shares at all. So the married couple cannot make an election under S282B ICTA 1988 in respect of such accounts.

    If the form is used to try to make an election for bank accounts or building society accounts, and there is no further evidence supplied, you should return the form pointing out the guidance on page 1 of the form at 'Bank and Building Society accounts'.

    If a married couple want to hold money in bank accounts or building society accounts on an unequal basis, they will usually hold separate accounts. Exceptionally, a married couple may decide to keep a joint account, but change the basis from 'joint ownership' to some other basis. If that is so, and they wish to make an election on form 17, they must submit evidence that they have legally changed the basis. In such cases, submit the case to IR Trusts Bootle.
  • Ebeneser
    Ebeneser Posts: 1 Newbie
    Yes you can save money placing savings with the lower income earner but you still pay tax. A better way to save for those who have flexible mortgages you are better off putting your savings into the mortgage.

    The benefits are that you save money on your mortgage bill and you don't pay any tax on the overpayment because Brown can't tax debt! The net effect is to earn a savings rate equal to your mortage rate plus the savings on your tax bill which is an automatic 20% on interest earned in most cases.

    Check with your mortgage provider whether you can access overpayments quickly. With the Nationwide for instance you can access overpayments in 24 hours if needed. So keep an absolute minimum in your savings accounts just for emergencies and no more.
  • Walletwatch
    Walletwatch Posts: 1,055 Forumite
    Can someone pls confirm that the tax counter resets every April? If my wife plans to quit her job sometime in Feb, all I need to do effectively is to transfer all my savings to her name after that, and intimate the Bank of her new tax status to ensure that no tax is cut on savings interest after that?
    It's always the grass that suffers, irrespective of whether the elephants are fighting or making love !!!
  • Aark
    Aark Posts: 247 Forumite
    Yes, Income Tax is calculated on income in the year to each 5 April.
  • malcolmord
    malcolmord Posts: 311 Forumite
    interesting
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