Can I use my Pension tax free lump sum to buy Premium Bonds for myself and my wife

DontCountChickins

Hi All

Can anyone Help me with this question.

I'm just about to take my pension and have various options one is a tax free lump sum of over 100k. My wife and I have maxed out with isa's. Were both 20% tax bracket although our personal allowance tax codes have been reduced possibly by earning over the £1000 interest personal allowance.  

We also have significant floating savings hence the reduction of our personal allowance tax code. Please could you help with this question I can't seem to find out if this is possible.

My question is can I put my tax free lump sum from my pension into our Joint bank account then I could buy 50k Premium Bounds and my Wife can Buy £50k Premium bonds with my tax free lump sum. 

Any guidance would be really appreciate. 

QrizB

Yes, you're allowed to buy PBs for anyone (yourself, your wife, me ...) with your tax-free lump sum.

Linton

Yes you can use your TFLS for buying PBs, gifting the money to your wife for her to buy PBs, or anything else except putting it straight back back into your pension to gain even more TFLS.

Whether this is the best use of the money is up to you to determine based on your circumstances, needs, and wishes.

The slight problem with holding £50K in a PB account is that you cant reinvest any winnings.  Perhaps you may wish to just put in say £40K and then automatically reinvest.

nologo

I think your allowed £50,000 each, so you can buy some for somebody else as well if you have more (children, grandchildren, any person at all)

DontCountChickins

Hi QuizB

Thank you for the quick response, I have seen things about HMRC and recycling and if I might get in trouble with them, or even being hit by a tax bill?
 

DontCountChickins

Hi MSE experts

Thank you

If Gifting do I need to fill in any forms for buying them for my wife,
I would assume I would buy them for myself and then does the wife buy Hers with my Pension TFLC  ( how do I gift them?)


thank you

eskbanker

DontCountChickins said:

I have seen things about HMRC and recycling and if I might get in trouble with them, or even being hit by a tax bill?

Recycling only relates to putting the money back into another pension.

DontCountChickins said:

If Gifting do I need to fill in any forms for buying them for my wife,
I would assume I would buy them for myself and then does the wife buy Hers with my Pension TFLC  ( how do I gift them?)

You give the money to your wife and she buys the premium bonds for herself.

molerat

Your pension TFLS will just be money in your bank account.  There is nothing special about gifting, you just give her the money.  We buy ours with our individual debit cards from our joint account. An on line NS&I account is the simplest way of doing it.

DontCountChickins

Thanks MSE Experts

For the Great Responses 

So I at any time put Any Amount of Money into my wife's bank account as a gift. I am about to take my pension and will still be a tax payer, My wife too will be finishing work within the next month or so, the wife pension would be around 8K per year and will fall way below her personal income tax allowance. She cannot claim any benefits as we have worked and saved all our life and have significant savings.

I have the majority of saving in my single bank accounts can I just move any of my saving money into a joint account to offset that personal income tax being reduced.

Ive had around £2500 removed from next years personal income tax allowance. will my wife's new circumstances 8K Pension non tax payer? impact on me moving my money into a joint or even her account.
sorry she will have a couple of options where she to will get a tax free lumps sum
Thanks

eskbanker

It sounds likely that shifting money between you will have tax advantages - as well as using joint accounts to balance out tax liabilities, you (collectively) may wish to consider whether to apply for the marriage allowance if she's a low earner and you're not (but still within basic rate):

https://www.gov.uk/marriage-allowance

LHW99

You could put £2880 per annum into a personal pension / SIPP for your wife (until she is 75). Tax relief would be added by HMRC, and she could then remove £3600 (depoit + relief) and not have any tax to pay as she would still be below her personal allowance. A ~6.5% immediate increase.

Hargreaves Lansdown doesn't charge fees for cash in a SIPP (I believe), but may want a minimum amount left to keep the account open. Other platforms may do similar, I can't say.