Transferring savings to spouse to reduce interest tax liability

I am considering transferring some funds from my personal savings account to my wife’s, as this would allow us to use her Personal Savings Allowance and her lower personal tax rate. The origin of savings is my income. We intend to use this money within the next few years as a deposit for a house that we will jointly own. Would doing so cause any potential tax issues I should be aware of?

Hi,

There are no Income Tax implications on the receipt of a cash gift unless the cash gift generates interest or dividends. These would then potentially be subject to tax.

Further guidance can be found here.

Tax on savings interest

Tax on dividends

Thank you.

Hmrc admin, wouldn't this be caught by settlements and therefore be ineffective for tax purposes, as in TSEM4205?

Hi Bella Boo
Cash gifts do not attract income tax or capital gains, whether the gift emanates from the UK or abroad.  
Any interest the gift generates once you receive it, may be subject to tax.  
TSEM4205 covers gifts that are not cash based.
Thankyou.

When did they change the rules so that it doesn't apply to cash? If the rules have changed to exclude cash gifts then you may want to remove examples 1 and 3 of the following hmrc helpsheet and change the description hmrc provide of settlor. https://www.gov.uk/government/publications/trusts-and-settlements-income-treated-as-the-settlors-hs270-self-assessment-helpsheet/hs270-trusts-and-settlements-income-treated-as-the-settlors-2023 ;1.1 A settlor A settlor is a person who ‘makes a settlement’, that’s someone who puts or gifts money or other assets into a settlement. This is known as ‘settling’ property and it can be done directly or indirectly"

I'm sorry Admin, my post seems to have lost its structure. I tried to break it up to make it easier to read as I appreciate you've got a lot of other people to reply to.

I am considering transferring some funds from my personal savings account to my wife’s, as this would allow us to use her Personal Savings Allowance and her lower personal tax rate. The origin of savings is my income. So the potential tax on the interest earned for the amount transferred by me to my wife will be calculated based on the her personal savings or it will be calculated based on my income bracket ?

Hi 

There are no tax implications from the transfer of assets or money between spouses and civil partners.  
Any money you transfer to your wife's bank account that attracts interest after the transfer, is taxable income of your wife and will be taxed based on her circumstances.

Thank you

My husband is a tax resident in the UK and he is doing his PhD at the moment with no income. I'm sending him money from abroad for his studies and paying for his cost of living at the moment and I 'm tax resident in Singapore. Does he need to file tax on the fund that he received from me? Thanks Daniel

Hi Weia chang,
No as this is seen as a gift and no tax is due on cash gifts unless this then generates any interest or dividends.
hank you.

Hi. Can you confirm I am understanding correctly. I currently have an investment trust. If I transfer to my wife there is no capital gains tax to pay? If she sells this in future does the capital gains accrue from date of transfer or from the date of the original investment by me? Thanks

Hi,
There is no Capital Gains Tax to pay at the time of transfer, but if later sold, it is the the date of the original investment that is taken into account for the purchase price to work out any gain.
Thank you.