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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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My wife and i have a joint bank account. i believe any

Customer Question

Hi, my wife and i have a joint bank account. i believe any interest accrued is shared 50 50 for tax purposes. if one of the joint holders uses the account to hold a fixed rate bond and the interest is fed back into the joint account is the interest still split 50 50 for tax or does the person opening the bond liable for all the interest and tax declaration.
Submitted: 7 months ago.
Category: Tax
Expert:  bigduckontax replied 7 months ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Your surmise that interest credited to a joint account is split for tax purposes 50/50. However, the interest on the fixed rate bond owned by one of the account holders accrues to their tax account and should be declared on their annual self assessment tax return. The fact that after receipt it is paid into the joint account is irrelevant.

Remember that the first GBP 1000 of interest is tax free in the recipient's hands. This is why deposit takers no longer deduct Income Tax (IT) from deposits when crediting interest.

I do hope that you have found my reply of assistance.