Joint accounts - Tax on interest

Tito · 2005-09-11T19:51:33+00:00

Can anyone clear up what the position is regarding the interest gained on a joint account when one person is a tax payer and one is not. I have read the IR pages and it doesn't quite answer my question. Which is this: Mr and Mrs A.N.Other have a joint account. Mr O puts in £1000 PM, Mrs O, puts in £100 Mr O pays the basic rate of tax, Mrs O does not earn anything over the allowance. They earn £100 per year interest (hypothetical!!!) Since Mrs O does not pay tax, she is able to either not have it taken off or have it reclaimed. So, on the £100, how is it worked out what is taxed and what is not. Is it 1) Halved so Mrs O gets £50 and Mr O gets £50 - Tax or 2) Is the interest worked out for each person on what they put in? Any advice will be much appreciated, as I am very confused.

Sep 11, 2005 20 Replies

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Ronald Raygun 20 years ago

Yippee!

Yes, I think perhaps you were. :-)

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Joint accounts - Tax on interest

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