💡 Money-saving tip alert! 💡
If you’re married or in a civil partnership, personal finance whizz Martin Lewis has uncovered a nifty trick to help you make the most of your savings! It’s all about swapping some cash between you and your partner to cut down on taxes and fatten up your wallets. 💸
Martin highlighted on his ITV money show that couples can transfer funds between each other to maximise those precious tax-free savings allowances. Depending on your earnings, you get a tax-free allowance for interest. Here’s how it breaks down:
🔹 Basic-rate taxpayers (20%): £1,000 interest tax-free.
🔹 Higher-rate taxpayers (40%): £500 interest tax-free.
Here’s an example to put it into perspective: Meet Val and Tine – they’re married. Val pays tax at 40% and earns £1,500 a year in savings interest, but she can only have £500 of that tax-free. That means she’s paying tax on £1,000. Meanwhile, Tine, a 20% taxpayer, only earns £500 in interest and isn’t fully using her tax-free allowance.
The smart move? They transfer some of Val’s savings to Tine. Now, Val’s paying no tax since her interest matches her £500 allowance, and Tine pays only £100 in tax due to her 20% rate on the excess. This saves them a hefty sum in taxes! 🤑
And it’s not just about savings accounts – this trick also applies to dividends and capital gains. So, if you’ve got investments in shares or plan on selling your business, working together on your finances could save you a pretty penny.
Plus, don’t forget about those ISAs! Shuffling funds between your cash and investment ISAs is another savvy way to dodge hefty tax bills.
In short, moving money around in your marriage isn’t just smart – it’s a deliberate perk of tying the knot! 💍
Got any questions? Drop them in the comments! 👇
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