Moving assets to partner

MrChips

Hi, I live with my partner, but we are not married. I am a higher rate tax payer, and she in only basic rate. Am I allowed to transfer my savings to her so that she only pays 20% tax on the interest - or is this only allowed for married couples?

Thanks

rjm2k1

Not 100% sure but I would guess it could be considered tax evasion and remember that your savings would BELONG to your partner, so in theory you could have trouble getting them back if you were to split up.

WHA

You can "give" money to whoever you like! HMRC would only regard it as tax evasion and disallow the consequences if you kept some reservation - i.e. if it was artificial and you had the "right" of it being given back to you later. Note well the earlier answer that for it to work, you really have to "give it" to them, which means you lose your entitlements and rights to it.

With "cash" (including bank balances) there are no capital gains tax implications as there is no capital gain. Be careful with other assets such as shares, property, etc., as they are deemed to have been transferred at market value (here the inter-spouse exemption works, but not for live-in partners), so potentially creating capital gains tax on the giver based on the value given, so you'd not only lose the asset to the other person, you'd also have a capital gains tax bill as if you'd sold it and received the money!!! Quite a trap to avoid!!

Of course, as with any lifetime gift, it may become relevant for inheritance tax - if you die within 7 years it may be added to your estate and inheritance tax charged on it.