Changing Accounts - Maximise Personal Savings Allowance

Keanu

I currently have a Santander 123 Account that all our bills are paid through. As a higher rate tax payer I will only attract the lower Personal Savings Allowance of £500.


Is there anything wrong (illegal) with my partner opening a similar Santander 123 Account and all the monthly bills being paid through that instead (along with the account balance) - as a lower rate tax payer she will attract the higher PSA of £1000, therefore saving us as a couple the tax on the interest I will currently have to pay beyond £500?

colsten

Nothing illegal about it. You can gift your money to whoever you like, whenever you like. You need to be aware though that

1. money is legally owned by the person in whose account the money sits
2. if you were to pass away within 7 years of making the gift, the money might still form part of your estate for inheritance tax purposes. Details: http://www.money.co.uk/guides/how-do-i-gift-money-without-being-taxed.htm

agrinnall

Colsten's point 2 could be moot as there is no IHT liability on transfers between spouses or civil partners.

https://www.gov.uk/inheritance-tax/leaving-assets-spouse-civil-partner

colsten

Correct. That's why I said might , not will, and linked to an article that explains it all