Can you transfer your personal savings allowance to your wife /husband?

ZeroSum

Qyburn said:

ZeroSum said:
(There isn't much choice for joint savings options either)

Shawbrook do joint accounts and are near the top rate.

I know there's options, but it is more limited.
Shawbrooks fixed rates aren't currently great, their Easy access has a decent rate but it's a tad too restricted for what I need in terms of minimum balances & withdrawal limits.
Plus it's actually more tax efficient just to put everything in her name as she qualifies for the £5k starter rate 

DigSunPap

There is a very simple solution to this. The husband can open a savings account in his name, separate from the wife's accounts. He can then earn interest on this account up to £1,000 tax-free, considering he doesn't exceed the allowance. This keeps savings individually owned.

xylophone

There is a very simple solution to this. The husband can open a savings account in his name, separate from the wife's accounts. He can then earn interest on this account up to £1,000 tax-free, considering he doesn't exceed the allowance. This keeps savings individually owned.

But at current rates, to earn £1000 in interest would require capital of around £25,000 in the sole account and (as far as I can make out) the OP is concerned about  what would happen to this money under Scots law if he were to predecease his spouse.

https://www.thegazette.co.uk/all-notices/content/103869

As for joint accounts under Scots law

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm15054

Spoonie_Turtle

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masonic

DigSunPap said:

There is a very simple solution to this. The husband can open a savings account in his name, separate from the wife's accounts. He can then earn interest on this account up to £1,000 tax-free, considering he doesn't exceed the allowance. This keeps savings individually owned.

Tax on £1000 interest is £200 per year if at basic rate. But wife would potentially lose approx £8000 to any surviving children if husband died.

Aretnap

If I understand correctly the reason for not wanting to put money in the husband's name is that in the event of his death his children (presumably from a previous relationship?) would have a claim to it under Scottish inheritance law, and they don't want this to happen?

If so, I don't think there's an easy way around the PSA problem. Some options might be:

(1) Transfer the money to an account in the husband's name, avoid the tax and take the risk

(2) Put up with the tax bill. The PSA is only worth a maximum of £200/person/year, fairly small beer in the grand scheme of things, especially if you're wealthy enough to have to worry about exceeding it in the first place.

(3) Make full use of ISAs etc (tricky if you can only use one of your two ISA allowances)

(4) Move out of Scotland and avoid Scottish inheritance law altogether (a bit drastic for £200/year).

(5) Spend the money now on a fast car and a round the world cruise (by far the most foolproof way of making sure it doesn't go somewhere you don't want after your death, and also of avoiding tax on interest. You can't take it with you, after all).

(6) Any I've missed?

masonic

Aretnap said:

(6) Any I've missed?

Get some legal advice on the best way to proceed. There may be arrangements that would protect the assets from such a claim. I have no idea how much is at stake in total (the value of one third of the husband's moveable estate), but this could be money well spent if there is any doubt at all about whether the current arrangements will be successful in disinheriting the child(ren).

justwhat

Aretnap said:

If I understand correctly the reason for not wanting to put money in the husband's name is that in the event of his death his children (presumably from a previous relationship?) would have a claim to it under Scottish inheritance law, and they don't want this to happen?

If so, I don't think there's an easy way around the PSA problem. Some options might be:

(1) Transfer the money to an account in the husband's name, avoid the tax and take the risk

(2) Put up with the tax bill. The PSA is only worth a maximum of £200/person/year, fairly small beer in the grand scheme of things, especially if you're wealthy enough to have to worry about exceeding it in the first place.

(3) Make full use of ISAs etc (tricky if you can only use one of your two ISA allowances)

(4) Move out of Scotland and avoid Scottish inheritance law altogether (a bit drastic for £200/year).

(5) Spend the money now on a fast car and a round the world cruise (by far the most foolproof way of making sure it doesn't go somewhere you don't want after your death, and also of avoiding tax on interest. You can't take it with you, after all).

(6) Any I've missed?

(3) Does not help for IHT


All debt is in husbands name. All liquid cash is in wife's sole name. All husbands earnings are paid into pension.(husband  claims marriage allowance) 

Wife  has low SE earnings. Most  SE earnings are paid into pension pot. Some savings are moving over to ISA's. (but large amount will remain in a high interest account)

masonic

justwhat said:

Aretnap said:

If I understand correctly the reason for not wanting to put money in the husband's name is that in the event of his death his children (presumably from a previous relationship?) would have a claim to it under Scottish inheritance law, and they don't want this to happen?

If so, I don't think there's an easy way around the PSA problem. Some options might be:

(1) Transfer the money to an account in the husband's name, avoid the tax and take the risk

(2) Put up with the tax bill. The PSA is only worth a maximum of £200/person/year, fairly small beer in the grand scheme of things, especially if you're wealthy enough to have to worry about exceeding it in the first place.

(3) Make full use of ISAs etc (tricky if you can only use one of your two ISA allowances)

(4) Move out of Scotland and avoid Scottish inheritance law altogether (a bit drastic for £200/year).

(5) Spend the money now on a fast car and a round the world cruise (by far the most foolproof way of making sure it doesn't go somewhere you don't want after your death, and also of avoiding tax on interest. You can't take it with you, after all).

(6) Any I've missed?

(3) Does not help for IHT

IHT is another issue entirely and under this arrangement should only come into play at the point both of the couple have died. That is unless the wife also has proginee who might try to claim part of the estate if she predeceases the husband, if the estate is sufficiently large.

I can only echo the point that if the estate is sizeable, it would be better to get regulated advice rather than collecting suggestions from people with partial information on an internet forum.

justwhat

masonic said:

justwhat said:

Aretnap said:

If I understand correctly the reason for not wanting to put money in the husband's name is that in the event of his death his children (presumably from a previous relationship?) would have a claim to it under Scottish inheritance law, and they don't want this to happen?

If so, I don't think there's an easy way around the PSA problem. Some options might be:

(1) Transfer the money to an account in the husband's name, avoid the tax and take the risk

(2) Put up with the tax bill. The PSA is only worth a maximum of £200/person/year, fairly small beer in the grand scheme of things, especially if you're wealthy enough to have to worry about exceeding it in the first place.

(3) Make full use of ISAs etc (tricky if you can only use one of your two ISA allowances)

(4) Move out of Scotland and avoid Scottish inheritance law altogether (a bit drastic for £200/year).

(5) Spend the money now on a fast car and a round the world cruise (by far the most foolproof way of making sure it doesn't go somewhere you don't want after your death, and also of avoiding tax on interest. You can't take it with you, after all).

(6) Any I've missed?

(3) Does not help for IHT

IHT is another issue entirely and under this arrangement should only come into play at the point both of the couple have died. That is unless the wife also has proginee who might try to claim part of the estate if she predeceases the husband, if the estate is sufficiently large.

I can only echo the point that if the estate is sizeable, it would be better to get regulated advice rather than collecting suggestions from people with partial information on an internet forum.

Sorry i meant  legal rights for inheritance not IHT