How much can i give my wife- money i mean?

tirednewdad

I am a self employed high tax payer while my wife is on a basic rate.

Is there a limit on how much i can give my wife?
Can i give my wife money to put into her account to gain interest, and then take it back when my tax bill comes in?

Is any of this legal? Is there a legal way to do it?

Sorry it is probably only a very basic question, but i am clueless

johnllew

Give her as much as you like (or can trust her with). It is quite a legitimate ploy to give your wife capital to invest so that the interest is assessable on her.

CLAPTON

you can give what you like to your wife but you can't take it back.. it's no longer yours
she can of course choose to give it back to you if she wants to

tirednewdad

Thankyou both. Really apprecaite your answers

Merlot

If you have children, you can use them too, free from tax.

johnllew

Merlot wrote: »

If you have children, you can use them too, free from tax.

Not if they are under 18 and the income produced from the capital you give them is £100 or more, in which case you will be taxed on all the income.

CLAPTON

Merlot wrote: »

If you have children, you can use them too, free from tax.

but any interest earned by children from money gifted by parents which totals over £100 per annum is taxed at the parents rate of taxation.

skyjumper

wife - husband or vice versa, when does it become income shifting and illegal? any thoughts

RayWolfe

It never does become illegal.
It is income shifting and it is allowed.

Stavros_3

Thats right, wife is 40% tax payer, I am retired and now part time and 20%, so she transfers all her dosh to me which I put in my high rate savings account, the taxman takes far too much anyway, so 'my' savings incur just 20% - kerching
P.S, I only found out about income shifting on here - thanks MSE

Stavros_3

PPS
There will be new legislation coming in around April 2009, that will target Income shifting for businesses where spouses are involved in the company, I think I have read it right.