Tax on joint stocks and shares account

Roryyoung91

Both myself and my wife have used our ISA allowance and are considering opening a joint dealing account with AJ Bell. Just wondering how this works with tax on any growth within the funds ( accumulation ) and any dividends. 

How do we pay tax ? or is it capital gains ? If we pay it, who pays it and how do we do it ? Does one of us do i through self assessment ?

Hope someone can help

MX5huggy

If you do SA then yes. If you don’t then you don’t need to do SA until you have £10k of Dividends to report but you have to pay tax on dividends of £2k plus each. https://www.gov.uk/tax-on-dividends

CGT allowance is £12300 per year each again you can report on SA but don’t have to. https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

You only pay CGT when you sell an asset but you can avoid it by selling before you get to the threshold and buy something else (or wait 30 days).

Here’s an article on it

https://www.brewin.co.uk/insights/ten-ways-to-reduce-your-capital-gains-tax-liability

Number 6 being the easiest one have you used both your pension allowances? 

george4064

To be honest, there’s no advantage to having your unwrapped investments (Dealing account for AJ Bell) in joint names. It just creates more admin work for you both and (correct me if I’m wrong) but you won’t get any better tax allowance treatment by holding it in joint names vs in individual names.

MX5huggy

george4064 said:

To be honest, there’s no advantage to having your unwrapped investments (Dealing account for AJ Bell) in joint names. It just creates more admin work for you both and (correct me if I’m wrong) but you won’t get any better tax allowance treatment by holding it in joint names vs in individual names.

I’m not sure if it’s more complicated, you just have to halve the income and CGT. If you have separate accounts unless you hold exactly the same assets purchased and sold at exactly the same time you end having to do 2 calculations. Might be advantages if incomes are different between the husband and wife. 

Keep_pedalling

The main advantage is that on the death of one owner the survivor has access without needing probate. The disadvantage is that one of you could do a runner with all of it.