HMRC has clarified tax rules for couples moving money between personal savings accounts, answering questions about whose income the interest counts as and whether a non-earning spouse must report it.
In a social media response, the tax authority stated: "When you move money between individual bank accounts, the person who legally owns the account is responsible for the tax on the interest earned." It also highlighted tax exemptions for savers.
Savings tax allowances
Each person can earn a certain amount of interest from savings each tax year without paying tax. The personal savings allowance is £1,000 for basic rate taxpayers, £500 for higher rate taxpayers, and zero for additional rate taxpayers. For joint accounts, interest is split 50-50 between the named account holders.
Those on lower incomes may benefit from the starting rate for savings, which allows an extra £5,000 of interest tax-free. However, this rate is reduced by £1 for every £1 of income above the personal allowance of £12,570, meaning it is lost entirely once income reaches £17,570.
ISA limits and changes
ISAs offer another tax-free savings option, with growth within these accounts exempt from tax. Individuals can deposit up to £20,000 a year into cash ISAs or stocks and shares ISAs, splitting the allowance as desired.
From April 2027, this changes: people will be able to deposit up to £12,000 into any ISA type, with the remaining £8,000 restricted to stocks and shares. However, those aged 65 and over will retain the full £20,000 allowance.
