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Tax on joint savings account

Paul_Croft
Posts: 5 Forumite

I am s pensioner and my wife does not work ir get an income as she is under pension age. We have a joint savings account and although I know I am allowed £1000 interest free what is my wife entitled to interest tax free and is that added to mine. IE. It my wife got £1000 interest tax free would it be a total of £2000 interest tax free. I know my wife filled a form in many years ago to say she was exempt from paying tax in savings but that may have changed since. Can anyone advise please as I do not want to go over the threshold and be taxed 20% on any interest about the allowance. Thank you.
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See
https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2420
Where interest arises on an account held in the joint names of spouses or civil partners, each will normally be taxable on half of the interest, under ITA07/S836. Where, however, their beneficial entitlement to interest (or any other income from a jointly owned asset) is not actually 50:50, they may elect to be taxed on their actual entitlement. Detailed guidance on jointly held property, previously found at TSEM9805. Note that certain cases require referral to: Mailbox, Trusts Technical (CS&TD).I know my wife filled a form in many years ago to say she was exempt from paying tax in savings but that may have changed since.This was in the days when interest was deducted by the savings provider before being paid to the account holder. Nowadays savings
interest is paid without tax deducted.
With regard to the current position on tax on savings interest see
https://www.gov.uk/apply-tax-free-interest-on-savings
and for more detail (with examples) here
https://www.litrg.org.uk/tax-guides/savers-property-owners-and-other-tax-issues/savings-and-tax
You will notice that depending on circumstances, it is possible to earn more than £1000 in savings interest and not be liable for tax.
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For tax purposes, a joint account is treated as if each holder had their own account holding half the total money.Reed0
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Get the savings in your wifes name, issue solved.If your wife does not get any money, benefits etc.She can earn £18,570 of interest a year tax free, over 10k a self assessment would need to be filed.0
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Paul_Croft said:..... We have a joint savings account and although I know I am allowed £1000 interest free what is my wife entitled to interest tax free and is that added to mine. IE. It my wife got £1000 interest tax free would it be a total of £2000 interest tax free. ....
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Cosmic_Life said:Paul_Croft said:..... We have a joint savings account and although I know I am allowed £1000 interest free what is my wife entitled to interest tax free and is that added to mine. IE. It my wife got £1000 interest tax free would it be a total of £2000 interest tax free. ....
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