Transfer savings to partner
dodgy
Posts: 162
Forumite
in Cutting tax
Hi,
I'm a higher rate taxpayer, my long-term girlfriend (whom I live with), isn't.
Would I be able to transfer savings to her to avoid paying tax at the higher rate on the interest? Is there a limit how much I can 'give' her, as she is not family.
Would it have a different answer if it was my Mother?
Many thanks.
I'm a higher rate taxpayer, my long-term girlfriend (whom I live with), isn't.
Would I be able to transfer savings to her to avoid paying tax at the higher rate on the interest? Is there a limit how much I can 'give' her, as she is not family.
Would it have a different answer if it was my Mother?
Many thanks.
0
Comments
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There is nothing to stop you making gifts to anyone you like. A few points -
1. The gift must be unconditional.You cannot insist she uses any income for household purposes. And of course you have no right to it if you split up.
2. Inheritance tax. If the gift is more than £3,000 (or £6,000 if you made no gifts in the previous year) then it will become a Potentially Exempt Transfer. If you die within seven years then it could still be counted as part of your estate, although the tax rates starts reducing after three years.
Both of the above would still apply if the recipient was your mother.
3. Capital Gains Tax. If the investment transferred consists of shares or some other "chargeable asset" then CGT might become payable. (bank or building society deposits are not chargeable assets) If the transfer is to a "connected person" then it is deemed to take place at market value and this moight give rise to a tax liability. Your mother is a connected person but as far as I am aware your girlfriend is not.
ElaineIf it’s not important to you, don’t consume it0 -
Super - thanks very much for that.0
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Not sure if this is relevant but the recent budget brought in the civil partnership act. its worth seeing if that helps. the link below is to the inland revenue website.
http://www.hmrc.gov.uk/budget2005/revbn28.htm0
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