Holding savings for 40% tax-band partner?

Cuidadosa

Hi All,

I'm sure this has appeared here a few times already, but I can't easily search for it!

I'm at 20% tax band and my (non-married but joint mortgage) partner is at 40%. He is thinking about stashing some savings in an account in my name since I only pay 20%. Some questions:

- Is there a limit?
- Will this push me over to the 40% band somehow?

And yes, we know that it would be then 'my money'.

Cheers!

jem16

Cuidadosa wrote: »

- Is there a limit?
- Will this push me over to the 40% band somehow?

You would have to count the gross amount of savings interest in your taxable income. If this takes you above £42,475 then you would be liable to higher rate tax for the amount over this. Other that that there is no limit.

Cuidadosa

So the only thing that pushes me over the limit is the INTEREST and not the lump sum from the savings?
And there are no limits on the lump sum? I.e. I've heard about limits to how much is a "gift" (e.g. for inheritance tax purposes) and I assumed there would be something like this too?

jem16

Cuidadosa wrote: »

So the only thing that pushes me over the limit is the INTEREST and not the lump sum from the savings?

Yes only the interest.

And there are no limits on the lump sum? I.e. I've heard about limits to how much is a "gift" (e.g. for inheritance tax purposes) and I assumed there would be something like this too?

There is no gift tax in the UK so any amount can be gifted. Only time when IHT may come into account is if the total estate is over £325k and the person giving the gift dies within 7 years.

Cuidadosa

Million thanks, you are an :A