Brought to you by
taxinsider

Tax Insider publishes monthly newsletters and reports.

Save content
Have you found this content useful? Use the button above to save it to your profile.

Tax Insider Tip: IHT And Gifts Out Of IncomeUsing The Savings Rate: Couples

30th Jun 2014
Brought to you by
taxinsider

Tax Insider publishes monthly newsletters and reports.

Save content
Have you found this content useful? Use the button above to save it to your profile.
For 2014/15 the first £2,880 of taxable savings income is taxed at a special rate of 10%. Thereafter, savings income is taxed at 20%. The special savings rate is not available if the taxpayer has taxable non-savings income of more than £2,880.
By moving interest-earning accounts between spouses and partners it is possible to take advantage of the special rate for savings and to save tax on savings income.
 
Example:
Alfred and Freda are both retired. Alfred has a pension of £20,000 a year. He has also accumulated savings over the years which generate interest of £2,500 a year.
 
Freda has a pension of £10,500 a year.
Both are entitled to the age allowance of £10,500 for 2014/15.
 
By transferring the savings into Freda’s name, they will be able to benefit from the savings rate of 10%, paying tax of £250 on the interest rather than tax of £500 (£2,500 @ 20%). 
 

This is a sample tip taken from our 136 page guide:
101 Ultimate Tax Strategies Revealed.

Click here to receive a free copy of this tax saving guide today!

Tags: