I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Thanks for your message. Can you give me some advice on how I can ensure the interest is being taxed solely under my wife's name eg can I document a gift to her of the sum, which she has invested in India in our joint account?
Also, we have added my wife's mum as a signatory to the account, for ease of administration. The funds are not hers. Do we need to document this too to ensure that my mum in law is not taxable?
Thanks for the update. I need to clarify one more point, which I should have mentioned in my first question.
We are taxed on an arising basis, which generally means when the money is paid. Currently, we are accruing interest, but not being paid this interest. This is due to the fact that the funds are placed on deposit on a compounding basis. So do do we declare this income when the funds mature and we actually receive interest?
If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.
Apologies, I need to clarify a point raised earlier by you. In the first reply you said that any capital loss. In light of your current reply, my understanding has changed. Eg funds transferred to India are GBP 100. Upon maturity of compounding, funds credited to my account in India are equivalent of GBP 95, due to adverse exchange rate movements. Can this loss of GBP 5 be offset against income tax?
Thank you for your reply..If your investment has lost money then it is a capital loss and you can't offset this loss against interest received and therefore get income tax relief.
You have to separate capital from income.I hope this is helpful.