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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I hold joint bank accounts with my wife. I wish for all the

Resolved Question:

I hold joint bank accounts with my wife. I wish for all the interest to be included in her income tax return. How may this be done?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Normal tax treatment is that interest is taxable on each spouses 50:50.


Where, however, their beneficial entitlement to interest (or any other income from a jointly owned asset) is not actually 50:50, they may elect to be taxed on their actual entitlement.

If you can support each spouses beneficial interest to be other than 50:50 then you allocate interest on that basis.

More information on this can be found here

http://www.hmrc.gov.uk/manuals/saimmanual/saim2420.htm

I hope this is helpful and answers your question.

Customer: replied 2 years ago.

How could I justify beneficial interest? My wife's earnings were significantly lower than mine?

Expert:  taxadvisor.uk replied 2 years ago.
Ming, thank you for your reply....

If your wife's contribution into the savings pot is less than 50% then my recommendation to you is to settle at 50:50 split in light of your comment. You will not be able to demonstrate that all interest earned belongs to your wife because of her contribution.

I hope this is helpful.
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

I have yet to complete my tax return for 2013-14. If I was to change the joint accounts to my wife's name only from now (August 2014), would the interest in 2013-14 and 2014-15 be treated as for my wife only?

Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply..

Interest from the period Aug 2014 onwards would be treated as hers only.
Tax year 2013-14 would remain joint and reported by both of you as 50:50.

many thanks

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