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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have made several investments in my wife's name, as she is

Customer Question

I have made several investments in my wife's name, as she is a 20% tax payer, and I'm higher rate. As a result she will be required to complete a tax return for the first time. Do I need to get documentation ready to state where she got the funds from to make these investments? If so, what is your suggested approach eg shall I write out gift letters. I don't know what the usual approach is in these cases, so I'm looking for guidance.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Was the money transferred to your wife's bank account from yours before the investments were made or did you make the investment direct from your own accounts?
Customer: replied 2 years ago.

I believe it was a mixture. The bulk of the investments were made via my wife's account (after I transferred the funds there), but a few have been made from my account.

In all instances, the paperwork is in my wife's name eg the application/registration forms have been done in my wife's name. Once that has been completed, any transfer from my account was made directly to the investment company with my wife's name as the reference.

Expert:  TonyTax replied 2 years ago.

It really doesn't matter if the money for the investments came from your bank as opposed to your wife's. Transfers of cash between a married couple are tax neutral.

If you want to keep a record of the source of the investment funding, then you could either do as you suggested which is to write a short note to your wife setting out what you have done each time an investment is made or you could keep a diary record of the investments as they happen or you could do both. That will satisfy any enquiry by HMRC.

I hope this helps but let me know if you have any further questions.