Tax arbitrage in savings accounts

MrFund

Hi Everyone

Just trying to get a better sense of how tax is treated for savings accounts.

I currently work (and I am taxed at the highest bracket). My wife does not work. If I open a non-ISA savings account for my wife, and we transferred all of our savings (held in my name) over to her name and it was earning interest it would be treated on her lower tax base? Is there any other hitches I might be missing?

Thanks!

Jonbvn

MrFund wrote: »

Hi Everyone

Just trying to get a better sense of how tax is treated for savings accounts.

I currently work (and I am taxed at the highest bracket). My wife does not work. If I open a non-ISA savings account for my wife, and we transferred all of our savings (held in my name) over to her name and it was earning interest it would be treated on her lower tax base? Is there any other hitches I might be missing?

Thanks!

This is perfectly legal. My non-taxpayer wife is quite wealthy, whereas I am a pauper;)

Aegis

MrFund wrote: »

Hi Everyone

Just trying to get a better sense of how tax is treated for savings accounts.

I currently work (and I am taxed at the highest bracket). My wife does not work. If I open a non-ISA savings account for my wife, and we transferred all of our savings (held in my name) over to her name and it was earning interest it would be treated on her lower tax base? Is there any other hitches I might be missing?

Thanks!

The only potential hitch is that the money is then solely in her name. As long as you're happy with that, it's a perfectly legal way to minimise tax as a couple.

Nikel

Yes you must trust your wife.