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Decoding Legalese: How AI Can Help Determine the Legality of Using Your Partner’s £1k Savings Allowance

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## Additional Taxpayer with £0 Savings Allowance

As an additional taxpayer, I am limited to a £0 savings allowance. However, my partner is a full-time PhD student with a potential opportunity to benefit from a 5% savings account. I am considering transferring £20k to them, enabling them to earn £1k tax-free.

## Legal Implications and Concerns

With this plan in mind, I am unsure about the legality of such a transfer. Would HMRC or the banks question the source of the money transferred to my partner? Are there any potential legal ramifications that we should be aware of?

## How AI Legalese Decoder can Help

The AI Legalese Decoder can provide valuable insight and guidance on the legal implications of financial transfers, ensuring that you are informed and prepared for any inquiries from HMRC or financial institutions. By utilizing this tool, you can confidently navigate potential legal issues and make informed decisions regarding financial matters.

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37 Comments

  • 3a5ty

    You can gift your partner 20k if you want, the money legally becomes theirs to do what they want with.

  • Dolgar01

    Yes you can. It’s a gift.

    Now for the important bit, you give it her, it is hers. Legally and completely.

    There is no legal way you can get it back, so if she dies, it goes according to her will. If you are not married and she had no Will, it goes to her next of kin, which is not you.

    If you split up, you have no claim on it.

    If she decides to spend it instead of saving it, you have no comeback.

    The next question for you to think about is, is it worth it? It’s only £1,000 allowance. Unless you are particularly wealthy, there are others ways of achieving almost the same result (pensions, ISA, NS&I) or, just pay the tax.

    After all, what you are trying to do is avoid paying tax on £1,000 by giving away £20,000.

  • defbref

    Its legal, if your gifting them the money. Its then legally theirs to do with what they want, including spending it.

  • diamondthedegu1

    Yeah just going to reiterate what others have said – it’s legal, but not something you should ever do with a person you do not trust very explicitly. As others have pointed out, once that money is in her possession, it’s hers. It means she could easily accept the money and run with it and you wouldn’t be able to do a damn thing to get that money back. Be very wary of this before ever lending money to anyone.

  • Global-Chart-3925

    Why not go the whole hog and suggest she put it in an ISA so you’re exempt from the £1k allowance?

  • Kind-County9767

    It’s fine but that 20k becomes theirs to use as they want. Depending on how your bank reports interest to bbsi you could also just add them to your savings account for a couple days at the end of the tax year. HMRC let’s banks submit simply what the account earned during the year and who was active on the account at the end of the year, which then splits the interest evenly. They can also submit what each account owner earned during the year though, so need to check what your provider is doing.

  • klawUK

    if they’re a student with no income they have way more than £1k saavings allowance. but to your question – totally fine. I do this with my wife who is basic rate tax payer so she has £1k vs my £500 we max both in cash and then push into ISAs

  • Ornery-Wasabi-1018

    Could your partner put all of their income into savings, and you fund the house, bills, food etc?

  • Mekazabiht-Rusti

    INAL or financial advisor, but I’d see this as you gifting your partner £20,000. So the question is really, you allowed to do that?
    How she uses the £20,000 is surely up to her.

  • Fluffy-Astronomer604

    The exam answer to your question is, yes. It’s legal to gift money to people without tax implications. There is, however, nuances to this.

  • deadeyedjacks

    Perfectly fine to gift money to others, ignore those saying otherwise.

    You might want to clarify whether by partner you mean legal spouse, or not.

    Once gifted they are free to do as they please with the money.

    The UK has no taxes or restrictions on gifts during your lifetime, freely given with no reservations or terms attached.

  • SMURGwastaken

    As others have said this is just gifting them money and hoping they gift it back later.

    If you’re married you’re better protected as if you split up you retain a claim on the money, but if not your partner can bounce and you will have no recourse whatsoever as the money is 100% theirs.

  • International-Seat14

    If you’re going to do that, seems like you feel it’s a long term relationship, so you should get married. Then you get the marriage tax allowance too.

  • manka2009

    What I’m more disappointed about is not realising that having just switched to additional rate my savings allowance is £0. Why didn’t I know this! Thanks peeps. Looks like all going to my Mrs for the monthly saving limits and then into my isa instead. What a fool I am, but at least it’s only two months into the tax year!

  • Toffeemade

    My great uncle gifted money to his wife like this. It wasa source of much amusement in the family that come the time she refused to return it and referred to it as ‘my little bit.’. I thought better of a similar scheme with my late wife after I.learned the story…

  • Aggressive-Bad-440

    Yes, it’s a gift, the only problem is what happens if you split.

  • DragonQ0105

    My wife and I do this to maximize our allowances but being married is different legally.

  • Froomian

    My husband and I do this. All our savings are in my name alone. But we are married. If we split up then he’d be able to claim half of everything. I wouldn’t do this with somebody you aren’t legally tied to.

  • audigex

    It is not legal for you to use it, that would be fraud

    It is legal for you to gift her the £20k and her to put it into savings

    The distinction may seem a little arbitrary, but there is a distinction between these two things in many areas. eg if you fall out there is no guarantee your partner gives it back, any civil claims made against her would include it as part of her assets, and if she died it would become part of her estate

  • ClintBIgwood

    Biggest risk is she not returning your money to be honest.

  • Western-Fun5418

    Yes.

    If you’re married there’s no issue.

    If you’re not that £20k and £1k is “theirs” so you might have some issues.

    One thing to consider for the future is the extra £5k allowance if you’re not working. My wife and I found it useful when she didn’t return to work after maternity.

  • The_Deadly_Tikka

    Theoretically yes this is fine.

    You would have to “gift” him 20,000. He can then “gift” you back the money.

    Problem here is when you “gift” him 20,000 it legally becomes his money and he can run away with it

  • Dangerous-Ad-1925

    Absolutely, my husband and I do this all the time. Make the most of all your allowances between you.

  • xxhamsters12

    You can legally gift 1k to your partner and then she can legally gift it back. It’s more of an issue of trust. Do you trust she would gift it back?

  • ukpf-helper

    Hi /u/saconde, based on your post the following pages from our wiki may be relevant:

    * https://ukpersonal.finance/savings/

    ____
    ^(These suggestions are based on keywords, if they missed the mark please report this comment.)

    If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.

  • lloydmcallister

    I hope so because I do the same

  • strolls

    You should probably just buy short gilts, as the redemption is not taxed. I think coupon is.

    This is the classic “interest on savings” hack for higher rate taxpayers, so you might as well just get used to it.

    http://www.yieldgimp.com

    IMO this is obvious fraud (although also obviously not serious and would surely never be prosecuted) or misuse of banking facilities because you don’t really see it as a gift to your partner – you are transferring the money in the expectation that they’ll send it back. And if it’s you who gets the interest then you’re not paying the tax that you should. You say it yourself in the submission title – to “use my partner’s account”; the bank’s terms and conditions will say that you’re not allowed to let other people use your account.

  • mazza_0000

    Don’t forget about gift tax…

  • Dominico10

    Put it into an ISA it’s not taxed rather than being dodgy and pretending to gift it when you aren’t doing. That’s illegal and called tax evasion.

  • WebProject

    Government and bank knows where the money come from, so bank will grass you up in the first days of investigation

  • Weird-Ad6317

    Im not sure but i do think that 45% tax is a fuckin robbery 

  • jdsupernova

    Just put a bet on something that is 1/20 odds. It’s just as much as risk but instant return if the 1k and no tax 😂

  • glasgbull

    You could just loan it to them and keep legal ownership of the money?

  • ThaGooch84

    Pretty sure u only have an annual 3k gift allowance here in the UK otherwise it’s a taxable event. Family or not it’s the same across the board

  • VanillaB34n

    It’s a gift, I think you can actually give up to 20k to someone