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Where Taxpayers and Advisers Meet

Giving money to my wife - should she pay tax on it?

Chippy99
Posts: 4
Joined: Wed Aug 06, 2008 3:16 pm

Postby Chippy99 » Mon Jun 06, 2005 2:24 am

Currently most of our assets are in my wife's name. She does not work and receives gross interest on the savings. The savings interest is currently below the tax-free personall allowance threshold.

However, I give my wife money (for housekeeping etc) some of which she pays into her savings account.

Is her income from me taxable? Seems ridiculous that she should have to pay tax on money from her husband, which she uses to buy groceries at Tesco's!

Thanks

Ron.

bob.fraser@towrylaw.
Posts: 765
Joined: Wed Aug 06, 2008 3:14 pm

Postby bob.fraser@towrylaw. » Mon Jun 06, 2005 6:32 am

No, housekeeping money for a wife from a husband isn't taxable. Why did you think it was?

Chippy99
Posts: 4
Joined: Wed Aug 06, 2008 3:16 pm

Postby Chippy99 » Mon Jun 06, 2005 6:56 am

I know it seemed like a strange question.

Its simply that I give her £500/month and from her perspective, it *is* income, so I just wanted to be sure, that's all.

With this money, and the interest from the savings account, her "income" is well over £4,475 (obviously). Whereas it seems crazy that she should be taxed on "housekeeping" money, it seems equally odd that a person can have a (say) £10,000 per annum income and be completely outside the tax system.

Cheers

Ron

Chippy99
Posts: 4
Joined: Wed Aug 06, 2008 3:16 pm

Postby Chippy99 » Mon Jun 06, 2005 7:08 am

I guess another way of putting it is that she is receiving "income" and income is taxable, right?

Unless of course it falls into some category that is exempt. I can't find anywhere that explains that this kind of income is exempt from tax.

Is is exempt simply because we are married? I doubt that.

And if that's not the reason, why can't my employer "give" me £4,000/month?

Seems paradoxical.

Cheers

Ron

Instinctive
Posts: 1797
Joined: Wed Aug 06, 2008 3:15 pm

Postby Instinctive » Mon Jun 06, 2005 8:00 am

Have you tried asking your employer for £4,000 per month without without providing any services?

And if he refuses, could you threaten to take him to court and to take him for every penny he has?

On the other hand try refusing to give your wife the £500pm she needs. As you admit, your wife already has possession of most of your assets. Most probably the only assets still in your hands are not worth having anyway.

Ramnik

robertmlaws
Posts: 100
Joined: Wed Aug 06, 2008 3:10 pm

Postby robertmlaws » Tue Aug 02, 2005 4:26 am

It is not subject to income tax because it is a gift. What your employer pays you for working is not a gift.

As long as you are actually married, gifts to your wife do not suffer any potential inheritence tax either. Were you married at the time you transferred the bulk of your assets to her (or perhaps they were always hers)? If not there might be an IHT bill for them if you die within 7 years of doing so.

Robert

TessaR
Posts: 1
Joined: Wed Aug 06, 2008 1:52 pm

Postby TessaR » Wed Jul 30, 2008 6:51 am

I just found this thread but it's very related to what I'm trying to find out. I'm self employed but only earn about £1000 pa from selling my crafts.

My husband is in full time employement and pays £600 per month into a savings account in my name as I don't pay tax. Some of it is saved and often it's used to pay bills.

Is this OK? I thought it was treated as a gift (and he's obviously already paid tax on it) but wondered if I should really be declaring it as my income on my tax return. Or do I need to enter it as a 'gift'?

Any advice welcome. Thankyou.

Richardzzz
Posts: 1
Joined: Sun May 14, 2017 9:25 am

Re: Giving money to my wife - should she pay tax on it?

Postby Richardzzz » Sun May 14, 2017 9:47 am

How far can you stretch this?

For example, if a spouse needs to keep taxable income at zero for some reason. Could that person work "Voluntarily" for their spouse, declare the tax on the spouses tax return and then get paid what they earned? I know this sounds convoluted. I also know that they would lose the benefit of tax allowance.

OK here's a fuller scenario: Wife doesn't work but if she declared any taxable income another government agency would pounce and start demanding regular payments.
The husband works.
The wife can make things and sell them. This would be very irregular income, not enough to warrant the regular payments the other agency would demand.
Many people work "voluntarily" for profit making organisations. So, the wife could make and sell things and declare the earning on the husbands tax return. The husband could then give the wife the money after tax as "house keeping!"

An agency like Child Maintenance Service would demand payments of a minimum of £7 a week. That's £364 a year. So as soon as any taxable income is earned they would have to be notified immediately of the "change of circumstances." But suppose the wife made one thing and sold it for £300, she wouldn't actually have made any money at all and would be down £64 at the end of the year. You can't flip-flop and say, "Now I'm earning, now I'm not, now I'm earning, now I'm not!" If the money was declared on the husbands tax return then HMRC would be happy that tax was paid.

Ian McTernan CTA
Posts: 1232
Joined: Wed Aug 06, 2008 3:02 pm
Location: Bedford
Contact:

Re: Giving money to my wife - should she pay tax on it?

Postby Ian McTernan CTA » Mon May 15, 2017 1:06 am

Whisper these discussions quietly, I don't think John McDonnell has decided Labour can tax this yet- but clearly the OP would be classed as 'rich' and so McDonnell might decide it's time to tax money passing between husband and wife and vice versa...
McTernan Associates Ltd
Chartered Tax Advisers
Bedford
Email through link on website:
http://www.imcternan.com


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