Joint Bank Account Interest - Beneficial Entitlement

I understand that, Interest earned on a Joint Bank Account is, by default, split 50/50 for tax liability purposes. However, from SAIM2420: "Where interest arises on an account held in joint names ... each will normally be taxable on half of the interest. Where, however, their beneficial entitlement to interest ... is not actually 50:50, they may elect to be taxed on their actual entitlement." Does this allow for a situation where, Spouse A could claim £1,000 interest, while Spouse B would claim the rest (£1,000 +). This would be advantageous where Spouse A was earning in excess of £17,570 (Savings Interest Limit) while Spouse B was earning significantly less, (allowing Spouse B to claim the interest tax free).

Hi ,
 

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Sorry for the misunderstanding - I was giving an illustrated example, not citing a personal matter. My query refers specifically to the reference from SAIM2420 re: interest on Joint Bank Accounts: (paraphrased for brevity) "Where... beneficial entitlement to interest ... is not actually 50:50, they may elect to be taxed on actual entitlement." So, although interest on a Joint Bank Account is deemed to be split 50:50 by default... Can Joint Account Holders, in fact, elect for a different percentage (eg 60:40) for their division of interest entitlement.

Hi, not an Admin but can hopefully help even if just a little. If a married couple owns property (property meaning something that belongs to you, not just buildings) in equal shares then they can only be taxed on 50% each because the assumed basis and the real basis are the same (50% each). If the couple owns something in unequal shares then they can either be taxed on the assumed basis (50% each) or they can make an election to be taxed on the share that they're legally entitled to (the real basis). So you can only elect to be taxed on a 60:40 split if that is your real entitlement (and on the provisio it isn't a settlement). If you're unsure about settlements you can find a basic explanation here; https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem4200

Hi ,
 

They can but it has to be done formally, ir married, by completing a form 17 - see : Declare beneficial interests in joint property and income . If not married/civil partners then income is attributable to them on the basis of their entitlement . Thank you .