Tax on savings

narrowboatboy

I'm a basic rate taxpayer but my better half doesn't work.
I'm likely to inherit money from my late mothers estate. It's big for us, probably likely to be about £75k.
My question is could my wife invest it in savings and therefor not pay tax on the interest or would we fall foul of HMRC.
I'm thankfully now debt free so looking at maybe using it to boost household income

leosayer

Great article here:
https://www.moneysavingexpert.com/savings/how-savings-tax-works/

narrowboatboy

leosayer said:

Great article here:
https://www.moneysavingexpert.com/savings/how-savings-tax-works/

Cheers for that. It's reading that that made me ask the question as in theory my wife would pay no tax. Couldn't find anything that would confirm what we plan to do is allowed (unless I missed it)

Beddie

Yes, you can put the savings in your wife's name and pay no tax on the interest.

Remember you also both have £20k ISA allowance each tax year, if not already used.

mebu60

As @Beddie says, don't forget a Cash ISA which would give you (currently) £20k each tax year in a wrapper free from tax. And at current savings rates your £1000 allowance as a basic rate taxpayer would enable you to save in the region of £20k - £25k without paying tax on the interest. 

If you put money into your wife's name understand that it becomes her money. She is unlikely to need to use an ISA and would likely gain more benefit from slightly higher non-ISA interest rates. 

Murielson

20K each in cash ISA and balance into savings in your wifes name, unless you also haven't used your £1k per annum savings interest allowance?

retiredbanker1

One major thing to remember - if you do as above and give the monies to your wife then the monies will be hers - to do as she wishes!
She could do a runner and there is nothing you could do about it.

narrowboatboy

retiredbanker1 said:

One major thing to remember - if you do as above and give the monies to your wife then the monies will be hers - to do as she wishes!
She could do a runner and there is nothing you could do about it.

I should be so lucky