Investing in OH's name

blueruby_2

I have a few questions that I have put down here, could anyone please answer them for me.

My husband is the sole income earner in our home. He is a higher rate tax payer. He invests in Cash ISAs and NS&I bonds for tax saving. We have a joint current account into which his salary is paid.

Is it legal & ok to open a Cash ISA, Savings & Regular Savings account in my name & invest in them, as the money has to come from my husband coz am not working & so not a tax payer?
Which is best way out to cut the taxes, having the accounts in my name or as a joint one?
What must be communicated to IR about the interest earned & tax paid on the Savings & RSA & how should that be done, in either case of a joint or sole account?

Would be great if someone could offer me good advice on the above. Thanks.

Susanjane_2

I am in same position as you and we just have all our savings in my name, so I earn gross interest.

As long as the interest you receive over the year doesn't go above the tax limit where you start to pay on it, you should be fine.

You must remember to fill in an R85 form and send to any bank or building society you open an account with (every time you open an account) otherwise they will automatically charge you interest. Hope this helps.

CLAPTON

yes you can use your OH's money to save in ISAs or any savings account...

Most couples with one non earning OHs do this to reduce tax.

For ISAs it can only be a sole a/c and you can save a max of 3,600 this tax year.

For normal savings accounts its easier to be a sole a/c because you will need to fill in a R85 form so the interest is paid gross (i.e. no tax deducted). I assume that the total interest will be less that your tax allowance 5435 per annum
If it were a joint a/c, half would be assumed your OHs and taxed and half would be yours and not taxed... (complicated and not all saving institutions allow this anyway)

You donot need to tell the HMRC about your ISA or your savings

Mikeyorks

Bear in mind there is also a new 10% Savings rate created from 6th April. So you can create interest up to your personal allowance of £5435 totally tax free. But you can also have a further £2320 (the limit of the new band) at the 10% rate.

However - if you go above the £5435 ..... you need to rescind any R85s you have filed. Tax will then be deducted at source at 20% on any interest paid to you .... and you will need to reclaim the relevant bits back at 20% & 10% after the year end.