Tax on savings - can anyone help?

oldvicar

gkerr4 wrote: »

poohsticks is correct - he can't register for gross interest - sorry for that.

I'm not sure on the other point - My point about the divorce awyer is that, for a married or civil partnered couple, there is pretty much no such thing as a sole asset - they would all be considered 'joint' by any solicitor. My only real experience here is based on rental income from a joint-owned property. this 'had' to be classed as joint income so 50% was paid at my 40% rate and 50% at my wifes 20% rate - it couldn't all go to her name in order to avoid the 40% rate. I'd have thought that the income from a million quid would have to have gone the same route surely?

The point is the property was jontly owned, so of course the income was split.

If you had legally given all the property to your wife, then the rental income from it would have been 100% hers for tax purposes. But then of course, legally she could have sold the property without your knowledge or permission.

Any

OP - can you clarify what about your OH? Working? Tax payer? At what rate?

Right, what happens is that every person has £8100 tax free allowance, and the next £35k is taxed at 20% (roughly, for exact figures have a look in the links posted above).

Assuming you have NO other taxable income, no pensions, savings, taxable benefits from any company...
And your OH does...

Then I would put all the money into savings account in your name (GKerr is completely mixing several different points, ignore the joint tax, divorce lawyers etc.. ).

In "normal" saving account the savings will be taxed automaticaly at 20% (unless you tell them anything else. Not sure bank will let you complete R85 on depositing such a large amount).
At the end of the year you can complete tax return and HMRC will refund you the tax that you overpaid (the "personal allowance" that is non - taxable amount.

Every person can also put away money every tax year that are untouchable by tax man - these products are called ISA and depending how long do you think you will be renting for before you need the money you could stash some every year there.

So if we look at 3% APR

£1 000 000 = £2500 per month in interest, less tax = £2000 net, this you should get every month in interest after tax.

This is the figure you should work with when looking at rental.

You will then be due some money back at the end of the year, for the tax that you have paid, but these will be delayed so I wouldn't be counting that into your monthly budget.

xylophone

Not exactly the case if the person's only income is from savings - see
http://www.hmrc.gov.uk/tdsi/example22.htm inserting updated personal allowance figure.
http://www.hmrc.gov.uk/rates/it.htm