Foreign income tax on FDs in joint name but interest deposited in SB account with single name

Hi My situation is slightly different but thought I can ask here as a reply. My wife, my son and myself moved to the UK in July, 2016. Since then, I have been receiving salary after tax deduction so I never filled a self -assessment tax return. My wife was a housewife until 2021, when she opened a small Airbnb business. When we filed the first tax return in January 2023 for the business, it was the first time we all realised about the foreign income tax. Before that, we had no idea about it. Actually, I opened an Indian NRE savings account a long time ago and I had initially requested to make it a joint account with my wife but for some reason, we recently found out that this is solely in my name and my wife is nominee only. Before 2016, my wife and I were remitting money from the countries we were living in at that time to India to make fixed deposits in joint name and the interest was deposited in the said NRE saving account. My question is that shouldn't the tax on interest be split 50/50 since my wife is definitely entitled to half of the money of fixed deposits amounts. She was working previously in the other countries so she was earning the money that she was remitting to make the joint fixed deposits. I would really appreciate it if you can help me. Also, when I was reading the guidelines on foreign income tax, I came across FTC penalties. Will these apply to our case? Thank you. Kind regards,

Hi,

As the account is in your name only it would be you that would have 100% of any interest received. you would actually need to make the account a joint one for it to be spit automatically 50/50. You can also submit a declaration of trust to say that she is the benefical owner of 50% of the account but this cannot be applied retrospectively. As you state you moved here in 2016, it is possible you are not domicile and can therefore claim the remittance basis.

Please refer to:

Paying tax on the remittance basis (Self Assessment helpsheet HS264)

Thank you.