From: "Black Hole \(@\)" 
Newsgroups: uk.finance
Subject: Re: Tax on Endowment Compensation Interest
Date: Sat, 02 Sep 2006 18:23:23 GMT

"Peter Saxton"  wrote in message
news:c8gjf29or9khnb1mtginqpec7k3juieitv@4ax.com...

> >If  we had actually received the mis-selling compensation money on the
day
> >that the policy was surrendered, we could have paid it directly into my
> >wifes savings account. Over the year since, any interest would have been
> >accrued by my wife. As she is not in paid employment any interest earned
> >would have fallen within her personal tax allowance for the year, and
hence
> >she would have paid no tax on it.
> >
> >However, if we had paid the money into *my* savings account, I would have
> >paid tax on it at my highest rate as I am in full time employment and so
use
> >up all my tax allowance each and every year.
> >
> >It is therefore not fair treatment to treat us differently now compared
to
> >what would have happened had we had the compensation when it was due.
Don't
> >you think?

> If you got some money and you earned interest on it would you say that
> you could have put the money in your wife's account and she wouldn't
> have had to pay tax on the interest so you shouldn't either?

If that were indeed the case then I would have no gripe with that. However,
I'm smart enough to know that that would be a stupid thing to do, and that
the smart thing to do would be to transfer it to my wife for her to put in
her savings account and so pay no tax.

This is what we have done in the past, so it's not a case of what I might
have done, it's a case of what I definitely would have done. *I* have no
savings. My wife has the lot (such as it is).