S & P 500 investment in wive's name

The_Palmist

Hello All, 

Husband - higher tax bracket
Wife - basic rate tax bracket

We have a little savings which we want to put in an investment, I am thinking of S&P 500 index via Vanguard. I was wondering if it is more tax efficient to open an investment account in wive's name or a joint account.

Not concerned about other risks like splitting up etc. at this stage.

Investment is a new field to us, any advice welcome.

Thanks in advance.

InvesterJones

Are you currently maxed out on your ISA and SIPP allowances?

masonic

An account each would be worth considering. But why opt for investing an index of a single country?

dunstonh

 I am thinking of S&P 500 index via Vanguard.

OK, that fills the US allocation but what about the rest of the world?

Or are you mistakenly looking at short term recent returns and making a bad investment selection on that basis?

MeteredOut

If I were to chose a single index in which to invest today, S&P 500 would be low down on the list.

As hinted at above, since you're paying a higher rate tax, if you're not already maxing out your pension contributions, it might be more beneficial for you to make the payments to your pension as you'll receive the higher rate tax relief.

But, thinking to the future, if you draw down your pension when your marginal tax rate is still the higher rate, it could be that putting the funds into your wife's pension would be better (assuming she'll be a lower rate tax payer at that time).

Or you could make enough contributions to your pension to reduce your tax to the upper end of the basic rate, and then the rest to your wife's pension.

Remember to take the annual allowances, and carry forward rules into account too (https://www.gov.uk/tax-on-your-private-pension/annual-allowance)

But, without knowing more about your finances, and making some assumptions about the future, there is no "this one is the right choice".

Roger175

The_Palmist said:

Hello All, 

Husband - higher tax bracket
Wife - basic rate tax bracket

We have a little savings which we want to put in an investment, I am thinking of S&P 500 index via Vanguard. I was wondering if it is more tax efficient to open an investment account in wive's name or a joint account.

Not concerned about other risks like splitting up etc. at this stage.

Investment is a new field to us, any advice welcome.

Thanks in advance.

Yes, don't put everything into something which is arguably at it's peak. You should be diversifying and only putting a given percentage into the S&P.

In the last couple of months, I've sold about 2/3rds of my S&P funds and global funds which I feel are too heavily weighted towards the S&P. I maybe wrong, but having recently retired I'm not prepared to take the sequence of returns risk which would result from a US crash/correction. In my view the gains over the last year or two are unsustainable, but do your own research. 

Middle_of_the_Road

The_Palmist said:

Hello All, 

Husband - higher tax bracket
Wife - basic rate tax bracket

We have a little savings which we want to put in an investment, I am thinking of S&P 500 index via Vanguard. I was wondering if it is more tax efficient to open an investment account in wive's name or a joint account.

Not concerned about other risks like splitting up etc. at this stage.

Investment is a new field to us, any advice welcome.

Thanks in advance.

The investment (gamble) you're considering, does fall in line with the sentiment contained in your signature line.

Albermarle

Investment is a new field to us, any advice welcome.

Does that mean that you both either have Defined Benefit pensions ( mainly only available to public sector employees nowadays) or no pensions at all?

The reason for the question is that within  most workplace pensions and all personal pensions, the money is normally held within investments.

MX5huggy

Vanguard offer 2 things, their funds / ETF’s these can be bought from any number of platforms, each platform offers ISA’s, SIPP’s and General investment accounts. Vanguard is also a platform where you can only buy Vanguard funds, until 2 weeks ago Vanguards platform was a good cheap way to start investing in Vanguard funds. They have introduced a minimum fee of £4 per month which means it’s now expensive for the small investor. There is a cap on the fees but it was and still is expensive compared to others for the large investor. Buy your Vanguard S&P500 fund on another platform such as iWeb or investengine. 

The_Palmist

InvesterJones said:

Are you currently maxed out on your ISA and SIPP allowances?

No we are not maxed out on ISA and SIPP.

incus432

When you see 'S&P 500' everywhere in posts from new investors it's a warning sign.  The new dotcom boom.