Moving money from accounts between husband and wife’s names.

gordir999

Are there any tax implications or other complications on money moved between accounts held by one married partner to the other? We have money from a house sale which we wish to distribute around multiple savings accounts keeping within the protection limits of 85k per organisation but it is currently in an account in only one partners name. We cannot tie it up long term as we will be buying another home early next year so are limited to easy access accounts.

Albermarle

Are there any tax implications or other complications on money moved between accounts held by one married partner to the other?

No tax implication. The only implication is that the money is then in their name, and legally theirs. In case of some dispute they might not give it you back. 

born_again

Temporary high balances

FSCS protects temporary high balances in your bank account, building society account or credit union account of up to £1million for 6 months. The protection begins from the date the temporary high balance is credited to an individual depositor's account, or to a client's account on an individual's behalf. This date may be earlier than the date the temporary high balance was credited to your account with the failed firm. You don't need to tell us if you have a balance higher than £85,000.

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

Brie

another non tax implication - any large movement of money will be scrutinised by the receiving bank as potential money laundering.  If it's between accounts in the same bank it may be obvious to the bank what's happening but less so if you are moving between unrelated banks (Natwest to RBS may be ok but Natwest to Halifax may not).  Might be good to advise the receiving bank where the money has originated prior to making the payment and have documentation available should they request it.

gordir999

thanks, yes I had spotted that but it looks like we will be into 8 or 9 months from the deposit date before a new sale goes through so we will exceed the 6 month protection.

km1500

There are no tax implications in transferring the money - you can give anyone as much as you like

the only tax implication would be who gets the interest but since you are married the interest would count toward your married allowance anyway

gordir999

hi Brie, oh yes! I have already had the third degree from HSBC when I moved some funds from NS&I savings into a current account and then split off into two savings accounts in our different banks and names, not got a problem with it to be honest but it does make you feel like you are doing something wrong 😳

eskbanker

km1500 said:

There are no tax implications in transferring the money - you can give anyone as much as you like

the only tax implication would be who gets the interest but since you are married the interest would count toward your married allowance anyway

???

Married couples are taxed independently according to who is named on each account (joint accounts being 50/50 by default), although have the opportunity to transfer a small marriage allowance between them to optimise tax liabilities if lopsided.

fourmarks

I am in this exact situation only with the benefit of a joint account as the base for all incoming and outgoing payments to multiple single accounts. My only tax concern is to ensure my partner, as a non-wage earner, holds the majority of the funds in her name to lessen the tax demands to come. This may or may not be applicable to your situation.

xylophone

but it is currently in an account in only one partners name.

Can you open a joint account with that same bank and transfer the sale proceeds into the new account?

You might then open joint savings accounts and split the money between them.

https://www.fscs.org.uk/what-we-cover/

Or you could open a joint account with NS&I  and hold all the cash in that account.

https://www.nsandi.com/get-to-know-us/security/protect-your-money

NS&I is a little different from your normal bank or building society. Yes, we're like a bank in that we’re a place to put your savings, but we’re also part of the government. And, as the government’s savings bank, we have the backing of HM Treasury, who guarantee 100% of everything you invest in NS&I. Not just £85,000 - every penny.