Gifts out of Income Calculation for Married Couples

[Red5000]

Please could someone explain how the calculation of disposable income is made in the case of a married couple. We wish to make gifts out of income but, inevitably, one of us will die before the other and the estate of the one who has deceased will need to be calculated and his gifts out of income declared on form IHT403. This form also seems to require the figures to derive the disposable income amount.
We have a joint current account where pensions and income from rental property and investments go and from which all household expenditure is paid. If the balance builds up, an amount is transferred to a savings account in one of our names; simply because one of us does the online banking and it's not possible to set up a joint account online which makes opening and closing these accounts difficult. Any gift would be made from the joint current account but maybe topped up from a savings account where the build up of income has been deposited.
Do I need to pro rata all expenditure figures according to our relative incomes to derive individual disposable incomes? We're in our 70s and hope to live many years yet and it would be much easier to treat us as a single unit but what then would the surviving one of us do in the event of the death of the other? I believe HMRC is keen to see the figures for the preceding two years.
Many thanks for any help on this matter.

[maths]

Joint bank accounts tend to be a bit of a nightmare for tax purposes.

If the source of the monies paid into the account are roughly from each of you approximately equally and expenditure out of the account is basically by each of you approximately equally then there is no need to treat the account as two separate accounts.

Any expenditure which would qualify as normal expenditure out of income can be treated as having g made by each of you 50/50.

Another approach is to pay all or some of the income into two separate sole accounts and each of you make gifts from your own account.

[Red5000]

Unfortunately, our incomes are disproportionate and I couldn't possibly pay for half the household expenses and so I'm not sure a 50/50 split would be accepted by HMRC.
Thank you for your reply but it does look as though from what you say, I'll have to make the two calculations.

[mironc]

Red5000, I have a very similar situation with my parents who are thinking about starting gifting from surplus income. They have a joint account into which their pensions are paid, and they pay all the household expenses from that account.

When it comes to filling in the IHT403 form on the first death, I agree with the post from maths that the expenditure should be split 50/50. I don't think that any other way is logical, unless one or more elements of the expenditure can be directly attributed to one partner, which for my parents is not the case.

My parents incomes are disproportionate, so I need to figure out how to handle this. I know their income totals exactly, so if I subtract half the expenditure from each income total I get the surplus income figure for each of them. I would then get them to transfer these amounts separately to the giftee/s.

Any comments and advice from anyone would be much appreciated, as we're just at the start of our IHT journey, and it looks like a bumpy road.

[uncle john]

I've been told that where there's a big difference between husband and wife's income, that HMRC might want to see joint expenditures split in the ratio of their incomes, not 50-50.
If that's true, I assume that's to reduce the potential surplus income for the bigger earner.
This does seem to be a somewhat cloudy area - would be interested in anyone's practical experience.

[mironc]

A recent article in the Daily Telegraph about IHT included the following

One of the most tax-efficient ways to give wealth during your lifetime is through the “surplus income” rule, which effectively allows for unlimited gifting. Only 430 people made use of the unlimited gifting rule in 2021-22 – yet they saved collectively £67m from death duties.

That's nearly £156,000 each! Hopefully some of the 430 were married couples, and one of them can tell us how they split the expenditure.