can i put savings in my wife's accounts to avoid 40% tax?

royal23

hey

might be a stupid question...

i'm a 40% tax payer. i have my ISA allowance maxed out.

my wife is a standard tax payer, and hasn't even got an ISA yet... (i guess you can see who is the saver in this relationship and who isn't)

so in order to get the best possible interest as well as tax free, i was wondering: could i just give her my spare money and put that into her savings?
i.e. the max allowance into an ISA, the rest on an esaver (we're with santander, they have 3.3% esaver).

is that OK, or do i need to tell HMRC? i would think not, because after all it's money i already paid tax on.

plus, i obviously have to trust my wife to keep that money as "our" money and not withdraw and buy shoes and handbags!

cte1111

It's fine to do that, no need to tell HMRC. It's sensible tax planning and standard procedure for many couples in your circumstances.

roddydogs

Provided you stay together! if not you've got problems as legally, of course its her money.

innovate

royal23 wrote: »

(i guess you can see who is the saver in this relationship and who isn't)

At a guess, could it be easier for you to save money than it is for her, for the simple reason that you pay 40% tax because you get paid a lot more than her?

Anyway, it is perfectly legal to put as much as you like into the account(s) of the spouse who pays the least tax. It becomes legally the spouse's money, though.

Worth also keeping in mind that you should not have more than £85K each in any one financial institution (incl any share in accounts held in joint names).

royal23

thanks for the quick response everyone!

innovate wrote: »

At a guess, could it be easier for you to save money than it is for her, for the simple reason that you pay 40% tax because you get paid a lot more than her?

Anyway, it is perfectly legal to put as much as you like into the account(s) of the spouse who pays the least tax. It becomes legally the spouse's money, though.

Worth also keeping in mind that you should not have more than £85K each in any one financial institution (incl any share in accounts held in joint names).

yes, point taken. of course it's easier for me to save money. though i've always been saving, regardless of my income level. trying to get her to save some money too now

ps: nice signature!

RobStaffs

Yes. H-L has a linked account facility to enable you to operate freely between both accounts.

innovate

RobStaffs wrote: »

Yes. H-L has a linked account facility to enable you to operate freely between both accounts.

yeah but they don't really have any savings accounts, and their cash ISA is way from competitive

RobStaffs

innovate wrote: »

yeah but they don't really have any savings accounts, and their cash ISA is way from competitive

Apologies.I was on about their Vantage S&S ISA offering.

royal23

even though not useful for cash isas (we'll stick to Santander for that, as we both have our accounts with them and they have some of the best rates), that HL information is good to know.
because i suppose i could also open a S&S ISA in her name to maximise tax planning... so far i only thought about savings.

xylophone

i could also open a S&S ISA in her name

Your wife must open the account - you can't do it in her name.

royal23

yes, of course. good point. i think what i meant to say was "we" could open it, but it's really her of course.