Tax free savings while unemployed

Sharon2626

Hi,

I'm about to stop working in order to be a full time mum. Can I get tax free savings even though my other half is working if we put the savings just in my name or are we linked together for tax purposes (we are married).

Thanks

Sharon

Archi_Bald

Check this: http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=nCRoVNw8-lk&formid=835

Everything in your name can be tax free (as long as you don't exceed your personal allowance). But everything in your name is also owned by you, and only you.

Sharon2626

Great!

Thank you for responding so quickly!

:-)

atush

You can also contribute to a pension while not working- you can only put in up to 2880 a year, which is grossed up to 3600 by tax relief

xylophone

And should it be relevant to your circumstances see http://www.hmrc.gov.uk/taxon/worked-examples.htm

RobStaffs

How do you go about getting a tax rebate? Our savings account is in my wifes name. Since setting account up last March 2013 she has stopped work and will not be returning to work as she will be looking after our granddaughter. Interest will be added in April 2014. Will interest still be deducted at source? or can we let to bank know?We have always saved in her name to ensure tax is charged at the lower rate, not sure if this is seen as an issue? Will HMRC view this as tax avoidance by myself?


Edit, Just see the link in an earlier post so I will have a look at this.

uknick

R85 form will tell bank not to deduct at source. Bank should send it to you if you ask.

Yes it is tax avoidance. But, I think you mean is it tax evasion? Definitely not.

How to get a refund, apply to tax office using form P50 as she's finished working.

But, if she is in receipt of any other taxable income, i.e. certain benefits/pension, there is another form, the name of which escapes me at present.

How long will a refund take? Goodness knows as you're asking for money back

SevenOfNine

I was (& still am) working but not earning enough to use up my whole personal allowance. I completed a form R40 for 11/12 & 12/13 tax years to reclaim my savings tax for sole a/c's and my 50% for joint a/c's. For 12/13 I sent my form on 10 June and got the refund on 3 July, pretty fast IMO Found the whole process perfectly simple but I am good at keeping paperwork in order and tidy, so seeing what interest I/we'd had wasn't difficult.

Most savings are in my sole name now to save me filling up the R40 yet again (though husband has ISA's), I complete the R85 'interest tax free' form each time I open an a/c or move money to new a/c's. Though I do keep an eye on earnings + total interests to make sure I'm not inadvertently committing fraud! :rotfl::rotfl::rotfl:

We still have 1 joint a/c (a Lloyds Vantage current a/c) which earns 3% on £5000. I cannot have that in my sole name so the R85 tax relief is applied to 50% of the interest and the rest has tax paid on it. The interest shows on our bank statements as being split, 1 entry being gross interest and the second being net interest. So even on joint a/c's you can still use the R85 to benefit from using the non taxpayers allowance.

I don't regard any of this as avoidance or evasion, I have a personal tax allowance and I'm using it.