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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

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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?
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 3 years ago.

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

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 3 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?

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