ISA for house wives (or husbands)

CLAPTON

suresh505 wrote: »

Thank you badger09. I trust her .

A follow-up query on that:
Let's say I need the money after a few years. If she withdraws the money from her ISA account and gives me the money (by depositing into my bank account), will there be any tax implications at that time?

Do I need to show that as an income of any kind at that time?

There is absolutely no reason why you can't do this as long as she chooses to give the money to you.


The money section of the newspapers are full of advice about using the spouse's tax fee status in exactly this manner.

Binky1976

suresh505 wrote: »

On a serious note, HMRC website says that gifts between spouses are exempt from tax - however, it also mentions that the annual exemption limit is £3000.

(www).hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#1

Does anyone know if the annual exemption limit applies to spouse?

That's not really relevant as that's about Inheritance Tax.

If the money is in your wife's ISA and she decides to take some money out and give it to you there are no tax implications.

thenudeone

In the UK, ALL Gifts between anyone are always tax free. Period.

Everyone gets confused about this, because if the donor dies with 7 years, the value of the gift gets added back on to their estate (on a sliding scale) for Inheritance Tax purposes. The Inheritance Tax on their estate can therefore be higher [than if the gift had been made more than 7 years before the death].
There are a number of exemptions including a general £3k a year (which many people mistakenly convert into: "I can only give £3k pa before I have to pay tax on gifts"), unlimited gifts between legal spouses/civil partners, unlimited small gifts under £250, and others. http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

But IHT is payable by the estate, not the recipient of the gift, so it does not change the underlying fact: There is no tax on gifts.

In summary: There are no tax implications (of any type) if you and your wife wish to gift any value of money in savings accounts to each other. But once you do so, the money is legally theirs.

suresh505

thenudeone wrote: »

In the UK, ALL Gifts between anyone are always tax free. Period.

Everyone gets confused about this, because if the donor dies with 7 years, the value of the gift gets added back on to their estate (on a sliding scale) for Inheritance Tax purposes. The Inheritance Tax on their estate can therefore be higher [than if the gift had been made more than 7 years before the death].
There are a number of exemptions including a general £3k a year (which many people mistakenly convert into: "I can only give £3k pa before I have to pay tax on gifts"), unlimited gifts between legal spouses/civil partners, unlimited small gifts under £250, and others.

But IHT is payable by the estate, not the recipient of the gift, so it does not change the underlying fact: There is no tax on gifts.

In summary: There are no tax implications (of any type) if you and your wife wish to gift any value of money in savings accounts to each other. But once you do so, the money is legally theirs.

Thanks a lot, that's very clear.