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I would like some advice please.

STR - currently shifting equity money around in easy access interest accounts + Cash ISA's .

I am a director / shareholder in a limited company and obviously have to do a tax return (or rather my accountant does). My wife works for the Ltd company part time but does not do a tax return. If i put funds in my wifes name do I have to declare this on my tax return ?

Any advice would be greatly appreciated

rgds dcbear

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I'd be very carefull about trying to avoid tax by moving assets between spouses.

I understand that your partner would have to declare that they had a new source of savings income, and ask to fill in a tax return themselves. Now there would still be an advantage particularly if she hadn't used up her ISA allowance or was a lower rate taxpayer but beware.

You would have to give up ownership of the assets. (Obvious, but many people forget that should things go pear shaped they would then have a real struggle to get any asset back. The courts don't take too kindly to a plea of "but it was only to get a lower rate of tax as she doesn't earn enough to take her into the higher rate etc...")

There is a nasty bit of anti avoidance legislation being bandied relating to "settlements" which basically means that HMR&C bless their cotton socks can recharachterise that income as actually being yours. It is currently being used to attack the old chesnut where a family company would be split between the earner and the spouse with both taking low salaries to ensure NIC's for pensions and dividends low tax rate for the rest.

If HMR&C suspect fraudulent attempt to avoid taxes they can use their powers to prosecute, and it can get very ugly very quickly. I've heard that they can also go back 25 years.....

None of the above should be taken as deffinitive advice, please speak to a professional with indemnity insurance such as your accountant. They will be able to advise what is acceptable and what is not.

Of course not everyone will play within the law, but the downside is pretty frightening.

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I think it's simpler than Last Hun Standing seems to suggest. As I understand you're talking about moving private funds from a sale of a jointly held property into your wifes name so that only basic rate tax is due on the interest.

If this is the case, then my understanding is that you wouldn't need to declare this, and it is in fact a sensible and often used tactic to reduce tax.

I don't think your status as a company director, or your wives as an employee of that company, are relevant in the case of private funds from the sale of a residence unconnected to the company.

Last Hun Standing is absolutely right though when he or she suggests you seek advice from someone qualified to provide it.

HTH :)

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If your talking about cash give it to your wife ASAP.

Make sure you both invest in ISAs to the best of your ability.

The settlements legislation cannot be used to attack the transfer of funds. The transfer of shares may be more problematic.

The only thing to bear in mind is if she goes over higher rate band approx £35k of interest Tax Returns will be necessary to account for extra tax.

And for those it applies to, the above will apply to gay and lesbian couples shortly.

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  • 302 Brexit, House prices and Summer 2020

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