Date: Sun, 1 May 2005 00:17:20 +0100
From: GSV Three Minds in a Can 
Newsgroups: uk.finance
Subject: Re: Tax on interest on joint accounts - 1 non-tax payer

Bitstring , from the wonderful 
person Dave P <7f39vxm02@sneakemail.com> said
>"GSV Three Minds in a Can"  wrote in message
>news:TNqP3+CZM9cCFAxn@from.is.invalid...
>> Bitstring , from the wonderful
>> person Dave P <7f39vxm02@sneakemail.com> said
>>>My wife and I have several joint savings accounts (bank/building society)
>>>on
>>>which hitherto we have declared the interest on our tax forms on a 50:50
>>>basis (as we have both paid tax at the same rate).  However, for one tax
>>>year only (2004-05) my own income will actually be below the tax threshold
>>>whereas my wife's will be in the 40% bracket.  In future years I am likely
>>>to be paying tax at the standard rate only.
>>>
>>>Obviously from 2004 onwards, it is in our interest for as much of the
>>>interest as possible to be declared by me, rather than my wife.  Is it
>>>permitted for me to simply declare all of it on my tax return?  The
>>>contents
>>>of the accounts concerned is basically 'ours' - would she need to
>>>officially
>>>'gift' it all to me to be legit, and if so, how would that be done in a
>>>manner to satisfy the taxman?
>>
>> Just open an account in your name only, and transfer some of the cash** to
>> that (assuming your wife is happy to go along with that
>
>Yup, that'd work... but what about the situation for 2004-05, which was
>actually my main concern in asking the question?

Awkward - in theory you can assign the interest other than 50:50, 
however in practise the IR are likely to want it justified, and you'd 
have a hard time doing so. If you'd told the BS/Bank in advance that 
would probably have worked, but by now they've probably already issued a 
50:50 split certificate of interest/tax deducted.

I've never tried doing it retroactively .. I'd always worked out in 
advance what is the best split. Over to anyone who has ....

-- 
GSV   Three Minds in a Can
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