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

dzug1

kelloggs36 wrote: »

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.

I think this will apply where you run a business and pay your wife a salary for not doing anything - not normal gifts.

Leighthal

CLAPTON wrote: »

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

Is it true that if I wanted to reclaim any tax my wife had paid on her savings that I can only do it from previous completed tax years.For example,she just got taxed on her new current account(forgot the R85 form:o ) so will she have to wait till April 2009 to claim it back?

Pagan98

dzug1 wrote: »

I think this will apply where you run a business and pay your wife a salary for not doing anything - not normal gifts.

Salary remuneration is already required to be in line with the business role in order to be claimed as a valid business expense and incur Corporation Tax relief.
The (poorly thought out) Income Shifting legislation is intended to catch people who run a family business where one member of the family is relatively uninvolved in fee-earning activities but owns a significant proportion of the shares. The revenue are intending to treat dividend payments to the non-fee earner as if they were to the fee earner and tax them accordingly (i.e. at 40% ). As well as going against the policy of individual taxation, this totally ignores issues relating to level of financial investment to start the business and intangible support activities that aren't directly fee-earning and certainly goes against the government's stated aim of encouraging entrepreneurship. The rule changes were withdrawn at the last minute for 2008-9 having been panned by everyone from small business groups to accountancy bodies as unworkable. The revenue are re-consulting for introduction in 2009-10.

stphnstevey

Income shifting legislation is more for Ltd's paying spouses pre-tax.

There is no tax incurred for shifting income already taxed to a spouse and this is not really 'income shifting'

Pagan98

Sorry if I confused matters, I was responding to a fairly narrow point above. I agree with the general response that money can be gifted between spouses and that this is a perfectly valid way to avoid tax by transferring savings to the lower rate tax payer.