Savings allowance

CarolinaS

MSE has the following saving tip on one article: "If you're in a couple and one of you pays tax at a higher rate then, providing you trust each other, put non-ISA savings in the name of the lower taxpayer and you'll take home more, as the lower taxpayer gets a higher personal savings allowance."
Any further advice/recommendation on this? Thank you.

masonic

What more do you need to know?

CarolinaS

Is this something that generally has no risk of investigation, such as being considered tax evasion. Thanks for the reply.

RG2015

CarolinaS said:

Is this something that generally has no risk of investigation, such as being considered tax evasion. Thanks for the reply.

I doubt MSE would recommend tax evasion, which is illegal. 

This is tax avoidance which is perfectly acceptable.

masonic

No, it's not tax evasion, but depending on your circumstances it might result in inheritance tax being payable if one of the couple died, or the money could be considered to belong to either of the couple should one need state funded care. There are fewer risks when the couple are spouses than merely cohabiting or in a relationship.

jimjames

CarolinaS said:

Is this something that generally has no risk of investigation, such as being considered tax evasion. Thanks for the reply.

Essentially you are giving that money to the other person hence the comment about trust. Apart from that there is nothing to stop you giving the money to a partner but there may be more risk if you're not married as suggest above by masonic.

Dazed_and_C0nfused

I'm sure this isn't uncommon but at the end of the day it's basically one person giving money away to avoid paying some tax.

Which unfortunately could end very badly for some people 😳

CarolinaS

Totally understood, thank you for all your replies 

jimexbox

If a parter can benefit from the starting saving rate, you can potentially earn upto 6k in interest tax free. 

Dazed_and_C0nfused

jimexbox said:

If a parter can benefit from the starting saving rate, you can potentially earn upto 6k in interest tax free. 

£18,570 including the Personal Allowance 😀

Silverbullet036

Myself and my wife do exactly this. I have an income from my pension and she doesnt , so we put our savings in her name to avoid paying any tax. Pretty simple really