Using my wife's ISA allowance

redinthesun

I have got a £40000 lump sum that I am happy to put into a 1 year ISA. As I feel the rates will drop I will put £20000 into my own ISA immediately. Can I then transfer the remaining £20000 to my wife so that she can open an ISA and do the same as she currently doesn't have one. Is this legal or would taxes be involved?

Money_Grabber13579

It’s perfectly legal, so long as you understand that you will be gifting the £20k to your wife, rather than her donating her ISA allowance to you. Any transfers between spouses are tax free.

redinthesun

Thanks. At the end of the year can she just send the money and interest back to me without any penalties?

400ixl

Assuming you are going to be putting it into a cash ISA as it is too short a period for stocks and shares, do you need an ISA wrapper as typically they have worse rates than fixed rate savings accounts.

Will you both go over the tax free savings allowance?

If not then why go for an ISA for such a short period?

XzavierWalnut

redinthesun said:

Thanks. At the end of the year can she just send the money and interest back to me without any penalties?

She will need to close her ISA and then transfer the money to you as a normal bank transfer.

Albermarle

redinthesun said:

Thanks. At the end of the year can she just send the money and interest back to me without any penalties?

Unless she runs off with her new lover with it 

jimjames

redinthesun said:

Thanks. At the end of the year can she just send the money and interest back to me without any penalties?

You could but what will you do with the money at the end of the year? Do you have a plan to spend it all? If not then surely the best thing is to leave it in the ISA so it remains tax free?

[Deleted User]

Hi,

redinthesun said:

Thanks. At the end of the year can she just send the money and interest back to me without any penalties?

if so, do you then intend to deposit it in your own Isa next tax year?

Johnjdc

redinthesun said:

Thanks. At the end of the year can she just send the money and interest back to me without any penalties?

She can! You just have to hope she does

35har1old

redinthesun said:

I have got a £40000 lump sum that I am happy to put into a 1 year ISA. As I feel the rates will drop I will put £20000 into my own ISA immediately. Can I then transfer the remaining £20000 to my wife so that she can open an ISA and do the same as she currently doesn't have one. Is this legal or would taxes be involved?

If you think rates are going to drop why not put it in a longer fix