Savings Account With Icesave

phil_744

Hello,

I have used up my wife and i's personnel allowance for the mini cash and thinking of opening up a high savings account with Icesave under my wife's name, this would avoid paying the 40% tax which would be applied if the account was opened under my name.
Please could anybody tell me if I will be able to make online payments i.e. bank transfers with sort code and account number from my own personnel account to my wife's Icesave account? I am not to sure if any payments going into the Icesave account would have to come from an account under my wife's name?

Icesave customer services were pretty poor in answering this.

Any help would be much appreciated.

Thank You,

Phil

esq

"Please note that we cannot accept funds from an account that is not in the name of at least one of the applicants"

DocProc

Please could anybody tell me if I will be able to make online payments i.e. bank transfers with sort code and account number from my own personnel account to my wife's Icesave account?

Briefly, the answer is 'No'.

Here are the Icesave Terms and Conditions:-

http://www.icesave.co.uk/media/terms_and_conditions.pdf

Interestingly, I see from Section 2 (Joint Accounts) that you can run a joint account in just one party's name, providing both parties agree to it in writing. This doesn't remove their 'equal rights'.

The account linked to the Icesave account does have be in the name of the account holder or I suppose it would fail the money laundering tests.

All transactions after the initial transaction, both in and out, are without exception, controlled from within the Icesave account. They are done by you using a Direct Debit facility and this facilty is set up with the first transaction.

Hereward

Does your wife have a current account? If so, you could transfer the money you wish to save into her account, before it is pulled into the ICESave account. Depending on the amount to be deposited you should only lose a few pennies in interest.

interest_Ted

Phil

I am not sure where esq got his quote from, as I could not see it in the T&C. (perhaps I'm going blind ?).

However my view is that T&C clause 4a, last sentence, holds the reason. You cannot legally set up a direct debit to debit someone elses account. Direct debits can only be set up by the Icesave account holder accessing the account via the internet. No one else should legally be able to access your Icesave account. So QED it cannot be done.

But I am not convinced that you cannot make BACS payments from non-nominated accounts. (I have made BACS payments into my Icesave, but always from accounts on my nominated list). I suppose that in view of 4a, if you try, regardless of whether you succeed or not (clause 1i), you run the risk of suspension under para H. I would have thought you may risk closure, but unless I've missed it, they do not seem to reserve that right in the T&C but will only consider it if you persitently telephone them (clause 9c). Anyway suspension is probably worse !

Putting all that aside, I expect to fall into exactly the same position as you next year, and have been considering options. One option that I have in mind would be to have a sole Icesave account for wife, and a joint Icesave account for her and me. For nominated accounts, the joint would have two of my bank accounts plus the wifes Icesave, while the wifes Icesave would have two of her bank accounts and the Icesave joint.
Although I will get hit for 40% tax on 50% of interest from the joint, the plan would be to only keep £1 in the joint except when moving money around. Being Icesave to Icesave, I would think those transfers might be instant, or same day, but not sure. This is not tried and tested by me, but just an idea, to give us good flexibility with minimal tax liability. I can see no legal etc. problems but would welcome anyone else's thoughts.

Hope this helpful

Ted

phil_744

Thanks for of the replies.

Ted - I suppose i could open up a another icesave account under my name and i could then transfer the money from my own personel account into my own icesave account and then on the same day of the cleared funds transfer it to my wife's icesave account! But, Would the funds have to remain in my icesave account for 7 working days or is this just for external accounts ??

Phil

DocProc

I think you guys are forgetting a very important point.

HM Revenue and Customs regard the 'actuality' of the arrangement to be the essence that is vitally important.

I don't think they would really warm to the idea of "Let's have all the husbands putting their money in their wife's name, and without handing over any of the power of ownership on it, so as to save income tax on the interest."

That isn't tax avoidance. It is surely tax evasion?

Hereward

DocProc wrote:

I think you guys are forgetting a very important point.

HM Revenue and Customs regard the 'actuality' of the arrangement to be the essence that is vitally important.

I don't think they would really warm to the idea of "Let's have all the husbands putting their money in their wife's name, and without handing over any of the power of ownership on it, so as to save income tax on the interest."

That isn't tax avoidance. It is surely tax evasion?

If you transfer money into your spouse's savings account you are transfering ownership of the capital to them. It would only be tax evasion if your spouse did not know about the account and you retained control of it.

interest_Ted

DocProc wrote:

I think you guys are forgetting a very important point.

HM Revenue and Customs regard the 'actuality' of the arrangement to be the essence that is vitally important.

I don't think they would really warm to the idea of "Let's have all the husbands putting their money in their wife's name, and without handing over any of the power of ownership on it, so as to save income tax on the interest."

That isn't tax avoidance. It is surely tax evasion?

Now I am happy to be corrected by any person if they can prove otherwise, but my understanding is that any transfers money between husband and wife are treated in the eyes of the HMRC as being allowed without restriction. In other words, I can give any amount today to my wife, at my discretion and her agreement, who will then have free aceess to use it or keep it at her discretion. And of course, the same in reverse. I can't think of any reason that this could be viewed as tax evasion.

In my view, this is no more tax evasion than drawing all my money from the bank and putting it under my mattress to avoid having to pay tax on the interest. Or for that matter - under my wife's mattress !

Ted

interest_Ted

phil_744 wrote:

Ted - I suppose i could open up a another icesave account under my name and i could then transfer the money from my own personel account into my own icesave account and then on the same day of the cleared funds transfer it to my wife's icesave account! But, Would the funds have to remain in my icesave account for 7 working days or is this just for external accounts ??

Hmm good question. I don't know.

They don't specify in their T&C - just says deposits made electronically.

I would like to think that transfers from another Icesave account would be treated as cleared funds when they arrive in the second Icesave account. But by the same token, funds from an external account would almost certainly have to stay for 7 days in the Icesave account into which they are deposited, before you could do anything with them, including moving them to another icesave account.

As I say - I have not tested the idea yet - for all I know they might not want to let people transfer between Icesave accounts, but I'm not sure why not. They have certainly confirmed to me that I can have more than one Icesave account without any problem.

Is there any other reader who already does this or who has tried this, who can throw some light on the subject. ?

Ted

interest_Ted

Phil - another thought.
I don't want to know the circs of your situation - but presume you've thought about adding your spouse to the current account from which you are moving money into the Icesave. If a joint account you could add it to your wifes Icesave account nominated banks list, and avoid any double transfers at Icesave level.
If only reason not to do this, is that your wife is at max on nominated accounts, then perhaps she should have a second Icesave account ?
If reason not to do it is that you need/wish to retain sole name account, then perhaps examine income into that account to see if any can be diverted to a joint account.
(Expect you've done all this !)

Ted