Does a joint account need to be 50/50 ?

AnotherJoe

I know if you own a house you can arbitrarily decide its owned in other than 50:50 proportions. For example the classic would be 99/1 for a BTL where one partner is a non taxpayer or basic rate and the other, HRT.

Can you do the same with a joint account ? I am HRT, partner non taxpayer ( due to no income ) thinking of moving a couple of ISAs into two Santander 123s, one in her name and one joint, the joint 99/1 in her favour so we can get tax free on both

bowlhead99

If you are spouse or civil partner the automatic presumption is 50:50. If it is just some other 'partner' or friend, then it is presumed to go on lines of who contributed the assets giving rise to the income.

The presumption of a 50:50 rule for married couples (i.e. you put in 90% of the cash but she automatically gets allocated 50% of the income regardless) can be overridden by making a Form 17 declaration to say actually 99% of the money in this account is now hers and she is going to have 99% of the income from it. Logically this has to be allowable as couples are free to make gifts of cash and other property to each other without any inheritance taxes or gains taxes, whenever they like. But if you want HMRC to accept some split other than 50:50, it has to be documented using the HMRC form.

Also, it has to be the case that the declaration reflects reality. You don't have a general rule to be able to have it taxed 'however you like'. So if you want to depart from the 50:50 split for married couples and say that 99% of the money is hers, then her income share must be 99% and the money really does officially belong to her whether she was the one who put it in the account or not. She could give a big chunk of 'her' money to whomever she likes, without you having any comeback, although that would change the remaining split of how the rest of it would be allocated.

Go to http://www.hmrc.gov.uk/manuals/tsemmanual/tsem9800.htm to see.

AnotherJoe

Thanks, very helpful.