Tax free spouse

rick_mse

My wife doesn't work she stays home with the kids. We have a joint current account earning interest, it's only a few quid but can I reduce the tax I pay on this because half of it should be classed as my wife's ?

On the same note, should any savings we have be in her name as much as possible so we pay less/ no tax ?

Robert_Sterling_3

Yes.

Spendless

Hi Rick
We are in the same position - I'm a stay at home mum too - all i did was ring my bank they sent me form to fill in (sorry can't remember what it's called) and return

Robert_Sterling_3

Form is R85. From Inland Revenue. Some banks & Building Societies will give you an R85. You need one for each account.

johnllew

There's advice on the R85 and a form you can print off here:

http://www.inlandrevenue.gov.uk/forms/r85.pdf

Robert_Sterling_3

My wife doesn't work she stays home with the kids.

No work to do there then.

rick_mse

No work to do there then.

Now you know that's not what I meant. ::)

rick_mse

There's advice on the R85 and a form you can print off here:

http://www.inlandrevenue.gov.uk/forms/r85.pdf

In terms of a joint account (2 people) how is one person's share decided ? Is it just a matter of dividing by the number of people, in this case 2, or can I say that a higher percentage of the account is my wife's ? The only income into the account is from my earnings. ???

Robert_Sterling_3

In respect of savings accounts I think the law changed in respect of joint accounts. The change is connected with Independent Taxation. The assumption now is that the account is shared 50% 50%. Form R17 is no longer in use for such accounts. Unless I am mistaken.

Robert_Sterling_3

Inland Revenue

Form 17

rick_mse

Looking at the actual R85 form, there is only a tick box to indicate a joint account next to the account. This would tie in with the 50/50 share as there's no option to fill in any actual values or percentages. I guess the bank would apply tax on half the gross amount.

Next step : fill out the form and see what happens with the joint current account.

Then get a decent on-line savings account in my wife's name and transfer money out of our joint on-line savings account (attached to the current account) into her new one.

I guess I/My wife needs to fill out a form for the new savings account as well. I assume it holds for on-line type accounts.

Duhh, I should have been doin this stuff four years ago