Married Couple Savings Tax Saving Tip

ashveen

Thanks for the valuable info

raymond_42

Hi all,
i enquired what tax band i was in to the inland revenue recently,
they told me i was in the low rate band ( 10% ).
so approached the bank ( CO-OP) & asked if i could have my savings taxed
at 10%.They told me ( qote) we only have 3 tax bands,
20%---
40%---
None taxpayer.
Does Anyone know if this is correct.
thanks Ray.

jem16

Co-Op is talking rubbish.

If you are a non tax payer you can fill out form R85 and pay no tax on your savings. However if you are in the 10% tax bracket you still pay tax on your interest at 20% and then have to claim it back from HMRC at the end of the tax year.

See;
http://www.hmrc.gov.uk/taxback/10pcsr.htm

Anthony_MK

MSE_Martin wrote:

Also if you're not married then it is arguable that if you were to give someone £10,000 let them earn interest and then they later gave it back for you to use - this is deliberate tax evasion.

Martin

What if you transfer £500 a month from your joint account to your partners savings account, they earn interest on it and in 2 years time use the money saved (plus interest) to pay off the joint-mortgage?

stphnstevey

johnllew wrote:

Here's where the Inland Revenue tell you how they deal with jointly held property including making a declaration on how the share of the asset is to be split.

Hi,

Haven't seen this post before, so sorry if quoting someone's message a while ago.

We (myself and my wife) have a BTL property held in joint names and I am a higher rate tax payer, my wife a basic rate. I have read the link mentioned. As far as I can understand:

I can legitamtely declare to the tax office that she recieves 100% of the income, therefore are joint income from the property is only taxed at basic rate (so long as it doesn't puch her into the higher rate band).

Correct?

humfer

Good tip - Have recently changed all of this now that my wife is a 40% tax payer and I'm not quite there yet. We each have an ISA but she has all the premium bonds in her name and I have any general savings in mine.

MarkyMarkD

stphnstevey wrote:

Hi,

Haven't seen this post before, so sorry if quoting someone's message a while ago.

We (myself and my wife) have a BTL property held in joint names and I am a higher rate tax payer, my wife a basic rate. I have read the link mentioned. As far as I can understand:

I can legitamtely declare to the tax office that she recieves 100% of the income, therefore are joint income from the property is only taxed at basic rate (so long as it doesn't puch her into the higher rate band).

Correct?

If you jointly own something, I'm not sure that you can claim that the ownership is 100%:0% split. If you are talking about property, its ownership is a matter of fact, not of statement, and you should determine the percentage ownership at the time you purchase the property IMHO.

This is why my wife owns our BTL property outright (and she pays tax at 0%).

MarkyMarkD

Re earlier posts:

(1) you CANNOT get dividends paid gross; they are always paid net of basic rate tax and this basic rate tax cannot be reclaimed.

(2) I think that people worrying about the taxation on their joint current accounts should find something bigger to worry about. Most people earn a matter of a few £ interest on their current account, so whether it's taxed at 0% or 40% is fairly irrelevant IMHO. Just make sure that the current account doesn't carry excessive surplus cash - which is best advice anyway - and that the surplus is swept into an account in the non/lower taxpayer's name.

stphnstevey

MarkyMarkD wrote:

If you jointly own something, I'm not sure that you can claim that the ownership is 100%:0% split. If you are talking about property, its ownership is a matter of fact, not of statement, and you should determine the percentage ownership at the time you purchase the property IMHO.

This is why my wife owns our BTL property outright (and she pays tax at 0%).

Hi Mark,

I think you miss-understood. I was not questioning the OWNERSHIP. That is legally binding and as you mentioned, set out in a legal ducument when you first buy the property.

However, by recieving a rental, you recieve an INCOME. However, I believe from the link mentioned below (please read), I can legitamtely make a declaration to the tax office that, despite 50:50% ownership, my wife recieves a higher percentage of the income than myself. Thus reducing tax.

Chrismaths

However, by recieving a rental, you recieve an INCOME. However, I m the link mentioned below (please read), I can legitamtely make a declaration to the tax office that, despite 50:50% ownership, my wife recieves a higher percentage of the income than myself. Thus reducing tax.

You can't. The split of income has to reflect the split of ownership. It can't be arbitrary. You could however gift the entire ownership of the house to the wife to reduce your taxable income, but doing that might be costly.