Where a married couple hold savings accounts and other investments in joint names, the income from those investments is split 50:50 for tax purposes, unless there is an election to allocate the income in accordance with their beneficial interests. This is particularly important where the couples’ marginal tax rates are different now that there are different personal savings allowances.
Where the one spouse pays tax at 40% and the other is only a 20% basic rate taxpayer, there can be significant tax savings.
HMRC need to be notified that the split of income is other than 50:50 and we can of course help you complete the appropriate forms.
Note that in the case of buy to let properties the election can only be made where the property is owned as “tenants in common” and you may need to get your solicitor to check the ownership position.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.