Tax on interest on joint account

[mart73]

Brief summary. After maxing out our ISA allowances (20k each), we're likely to have a fairly significant lump left in a joint bank account. The account is paying 4.15% so it's worth keeping there.

My wife is in the higher rate tax bracket, I'm in the standard. Neither of us are self employed.

Is anyone familiar with how tax is calculated on a joint account. Is it something the bank calculate & push to HMRC?

I'm trying to best work out what my options are.
Any info appreciated, my bank weren't particularly helpful.

[YouWhat]

You pay 50% of interest at your rate of tax and she at hers. All via self assessment.

[lizardbrain]

I'm not entirely sure how good HMRC are at gathering data on joint interest accounts - I would be interested to know as my partner is on PAYE and i'm on self assessment and we are never quite sure whether she is paying correctly or not

I know they are pretty good with the sole accounts on PAYE

[alscar]

Money in a joint savings account is deemed to be held 50/50 and any interest paid likewise.
Once upon a time you could declare a different ownership percentage but no more.
I’ve no idea if Banks declare said interest to HMRC ( HMRC always say they do ) but each year when we do our SA I make sure I have certificates of interest ready to give to my accountant who then does the return.

[YouWhat]

If you want to pay less tax as a couple, just open an account in your name only and put it all in there.

[KPE]

Another option is to put cash in Premium Bonds. It's tax free and you will get your investment back although the yield is not guaranteed unlike the interest.