Instant savings account.

Paul_Croft

My wife does not work or have any sort of income. Therefore does not pay any tax.I am retired and wondered if I can put a considerable lump sum say £85,000 into a bank/ building society’s  instant access savings account under her name, and whether the interest of 2.35% for a year would mean she would pay tax on any interest over a certain amount. In this situation she would earn £1.997.5 interest but is she only entitled to £1000 tax free only. I know alternatives are £20,000 Isa’s but I am not cleat on how much my wife is entitled tax free. Please could you advise as I have always supported her. Thank you. 

35har1old

Paul_Croft said:

My wife does not work or have any sort of income. Therefore does not pay any tax.I am retired and wondered if I can put a considerable lump sum say £85,000 into a bank/ building society’s  instant access savings account under her name, and whether the interest of 2.35% for a year would mean she would pay tax on any interest over a certain amount. In this situation she would earn £1.997.5 interest but is she only entitled to £1000 tax free only. I know alternatives are £20,000 Isa’s but I am not cleat on how much my wife is entitled tax free. Please could you advise as I have always supported her. Thank you. 

Instant Access accounts have interest rates in access of 5% and as she has no income she would benefit to the full value.
Do you pay tax if so she could transfer 10% of her personal allowance to you

eskbanker

Paul_Croft said:

My wife does not work or have any sort of income.

[...]

I am not cleat on how much my wife is entitled tax free. Please could you advise...

She can earn up to £18,570 of savings interest before paying tax:

https://www.moneysavingexpert.com/savings/tax-free-savings/

As above, steer well clear of an account only paying 2.35% - also bear in mind that any money you save in her name is legally hers, should that make a difference to your thinking.

Bigwheels1111

First things first 2.35%, hit yourself with a hammer as an alarm clock.

Wake up.

It's 2024.

Don't tell me your bank is giving you this pitiful rate.

There are 50/100 new banks and savings accounts out there.

Most you may not have ever heard of.

Atom, Raisin, Ford Money, Tandem, Al Rayan, Gatehoue Bank to name a few.

All have FSCS protection.

If unsure about a bank you choose ask on here.

Just remember the 85k limit if for the funds you put in.

What about the interest, thats not covered as takes you over 85k, that would be £4,250 at risk.

At 5% which is the minimum rate you should be getting your wife could have £370,000 in her savings accounts.

This would earn £18,500 in interest.

Still no tax to pay.

Just a self assessment return needed as over 10k of interest.

I look here as updates more often than MSE.

https://moneyfactscompare.co.uk/

Click on savings top left, Then easy access, Fixed etc.

When the page opens select rate order for best rate.

35har1old

Bigwheels1111 said:

First things first 2.35%, hit yourself with a hammer as an alarm clock.

Wake up.

It's 2024.

Don't tell me your bank is giving you this pitiful rate.

There are 50/100 new banks and savings accounts out there.

Most you may not have ever heard of.

Atom, Raisin, Ford Money, Tandem, Al Rayan, Gatehoue Bank to name a few.

All have FSCS protection.

If unsure about a bank you choose ask on here.

Just remember the 85k limit if for the funds you put in.

What about the interest, thats not covered as takes you over 85k, that would be £4,250 at risk.

At 5% which is the minimum rate you should be getting your wife could have £370,000 in her savings accounts.

This would earn £18,500 in interest.

Still no tax to pay.

Just a self assessment return needed as over 10k of interest.

I look here as updates more often than MSE.

https://moneyfactscompare.co.uk/

Click on savings top left, Then easy access, Fixed etc.

When the page opens select rate order for best rate.

Coventry, Principality building societies in the 5% plus bracket
90 day notice account with Vanquis 5.4 %