Married Couple Savings Tax Saving Tip

System

Hi all,
My wife is not a UK resident, she is here on a spouses visa only at the moment and will not get residency for at least another 2 years. She has her own bank account and is a full time student with no income, will i be able to put money into her account and not pay tax on it?

Thanks

DiggingOut

Yes.

System

My wife has a personal pension plan that she does not put any contributions into since she stopped working to look after our two children. Is it possible for me to put money into my wife's personal pension plan up to the tax free yearly amount and claim the tax back myself ?

ianduncan

lisyloo, you said that joint accounts are split 50/50 for tax purposes, and that you need to have separate accounts to benefit from one person not paying tax- what is the best way to arrange current accounts to take advantage?

eg we have a joint account, my wife isn't earning ( but she IS working- looking after our 16 month old!!). Do we pay my wages into the joint account, and transfer what's left over into a separate acc of her own( in which case it would be better to just put leftovers into an ISA);
or pay wages into her account and transfer what's needed for bills into the joint acc.

Having typed it out, and knowing we don't have a lot of disposable income left over at the end of the month, i don't know that separate accounts would make us much money from the taxman (/woman), but i would appreciate any good ideas or systems for the future when i start earning megabucks!

lisyloo

Is it possible for me to put money into my wife's personal pension plan up to the tax free yearly amount and claim the tax back myself ?

I don't believe you can put money into a pension if you aren't earning, so my answer would be NO.
But check it out with an expert in case I'm wrong (or out of date).
Do you have a financial advisor who deals with your pension at work who could answer the question for you?

lisyloo

lisyloo, you said that joint accounts are split 50/50 for tax purposes, and that you need to have separate accounts to benefit from one person not paying tax- what is the best way to arrange current accounts to take advantage?

Well I would say there is a trade off here, because you both want access to money for paying bills, but want to minimise tax.

I think I would do it as follows.
Leave money you need for bills etc. in the joint account. You may loose out a little on interest but personally I wouldn't want to compromise on access.
Put any extra money that you don't need during the month into a savings account in her name.

in which case it would be better to just put leftovers into an ISA

Well it depends on what rates you get.
At the moment I believe you can get a better rate on savings accounts e.g. Cahoot @ 5.5%.

System

here is a slight twist to the original question.
i am starting uni full time as a mature student, my wife earns around 32k can i take all our savings into my name and get this tax free as a student, assuming im not working at the same time??
cheers

lisyloo

Yes.

isasmurf

My wife has a personal pension plan that she does not put any contributions into since she stopped working to look after our two children. Is it possible for me to put money into my wife's personal pension plan up to the tax free yearly amount and claim the tax back myself ?

This would be better asked on the pensions board.

As a non-earner your wife is allowed to contribute up to £2,808 (net of tax) into a personal or stakeholder pension. You can give your wife (or children) money up to this limit to put into her personal pension. Even tough she's a non-taxpayer her pension provider will automatically reclaim basic rate tax for her and add it to her pension pot. You, as the husband, cannot claim back any tax relief.

Although remember the money will then belong to the wife until she reaches pensionable age. Likewise if you give money to your children to stick in a PP or SHP, this will belong to the child until he/she reaches pensionable age.

aagoren

My wife and myself sharing the money.
I have the credit cards with all the BTs and she has the savings.
I pay for the credit cards and she paid intrest.
if you need £4745 intrest before pay intrest on that, that is about £87K in saving.
Who have this amount in saving.
put it in off set account against your mortgage and save even more.

there is one point which I read it somewhere here.
If the wife (or the husband) have all the saving on his/her name. worst to worst and he / she die. If you don't have a will , all the money is going away , isn't it?