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

skyjumper

what about if wife is not working at the moment and not paying any tax. what would happen if the income is shifted and then, as she is not paying any tax on her interest too, would this be considered bad in the eyes of taxman?
total interest earned in a year is def less than 5000 or much less than that. But as it was husband's income which should have been taxed at 40%.
wife not claiming ANY state benefits

sloughflint

That would be fine. She would need to complete an R85 form for each savings account;
http://www.hmrc.gov.uk/forms/r85.pdf

CLAPTON

skyjumper wrote: »

what about if wife is not working at the moment and not paying any tax. what would happen if the income is shifted and then, as she is not paying any tax on her interest too, would this be considered bad in the eyes of taxman?
total interest earned in a year is def less than 5000 or much less than that. But as it was husband's income which should have been taxed at 40%.
wife not claiming ANY state benefits

husband and wife can transfer assets .... its allowed and recommended.
most married people have been doing this since forever.

Your example is the most common... wife not working , looking after the kids etc. husband transfers all not ISA savings to wife and she fills in a R85 so it paid tax free...

skyjumper

what if R85 was not filled. can you get the tax reutrned retrospectively. tax was debited at 20% when interest was paid all this time. or is it from the day R85 is filled?

CLAPTON

yes you can reclaim it retrospectively from the tax people .. form R40
you can go back to year 2002-3

skyjumper

thanks Clapton for the info

Merlot

CLAPTON wrote: »

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.

Thank you for the added info clapton. I do have saving in my childrens name, but I do ensure that I do not earn more than £100 interest.

I do not work myself (SAHM, and not on benefits), all the savings are in my name or the childrens (the Halifax regular saver pays 10% rate of interest for the children).

What Would happen if I earned more than £100 interest per child as I am a non taxpayer? I have filled in R85 forms for each savings account I have in my name and the childrens.

Merlot.x

Hoddie_2

What Would happen if I earned more than £100 interest per child as I am a non taxpayer? I have filled in R85 forms for each savings account I have in my name and the childrens.

The total income from these accounts would be treated as being your income. This is then added to your other income and taxed accordingly unless covered by your Personal Allowance.

CLAPTON

If your childs account exceeds 100 in interest then it's taxed at your rate... if your total taxable gross income (your saving interest plus the childs) exceed 6035 per annum then you will have to pay tax on it (if you have no earned income then your rate will be 10% for the first 2320)

kelloggs36

if you transferred money to your wife who was not working, then i believe that the tax office are looking at making this more difficult - ie proving that they have actually earned the money rather than being just given it for nothing to avoid tax.