Savings account and income tax, Will I have to pay more tax if I have a savings account? Options

[Beagle]

Hello everyone

I'm reasonably new to the whole self-employed business although I've taught in schools for years. I don't even have a savings account but my hubby has a savings account that I occasionally contribute to. I've decided that I'd like this to be a joint savings account because I don't have much to my name otherwise! We hardly get any interest from this account, we used to though, before all the banking crisis happened.

The only thing that worries me is will I have to pay more tax because of this savings account? In all honesty I don't contribute much so if I have to pay more tax because of it I'd rather leave it under hubby's name. If you have any suggestions much appreciated!

[Seer_Green]

I suppose the only thing is you'll pay tax on any interest the account gets (unless it's an ISA) - not sure how this works for joint accounts? I don't think this is affected by where the money comes from in the beginning - you'll presumably have already paid tax on it (if it's over the threshold) on your tax return.

[Geranium]

If you get taxable interest on a joint account, you just declare half of it on your own tax form.

(This is what I do, anyway!)

I think you'd have to declare half the interest even if you didn't contribute half the savings....

(IMG:style_emoticons/default/mornincoffee.gif)

[sbhoa]

If you get taxable interest on a joint account, you just declare half of it on your own tax form.

(This is what I do, anyway!)

I think you'd have to declare half the interest even if you didn't contribute half the savings....

(IMG:style_emoticons/default/mornincoffee.gif)

Yes, you have to declare half the interest.
I know because i had this in reverse. As I don't earn enough to pay tax I got a rebate based on half the interest when some bonds we had in joint names matured.

[agricola]

It doesn't have to be 50/50, you can split the interest say 40/60 as long as it adds up to 100%! It is presumably taxed at source anyway so it won't make much difference unless one of you makes a business loss and gets a refund. (IMG:style_emoticons/default/huh.gif) ( I think !)

[Tenor Viol]

If you get taxable interest on a joint account, you just declare half of it on your own tax form.

(This is what I do, anyway!)

I think you'd have to declare half the interest even if you didn't contribute half the savings....

(IMG:style_emoticons/default/mornincoffee.gif)

In my line of work, we assume that it's divided equally amongst the parties to the accounts - anything else is too hard!

[vectistim]

For 'normal' people its largely a non-issue. A 'normal' person will have had tax taken off by the bank before it is credited. It would only be an issue (and a fairly small one at that) if you had the bank pay you gross, or if you were a higher rate tax payer and had to pay extra tax on it as a result.

[Alison]

Given interest rates at the moment, the amount are likely to be so small it won't make much difference. (Unless you have a few millions stacked away in your savings account (IMG:style_emoticons/default/tongue.gif) ) You will need to declare the interest on you tax form, along with any piffling amount you may already be getting from your current acocunt etc.