What tax do we pay on interest from a joint account?

If you have a joint account with your spouse, HMRC has a simple rule to calculate the tax due:

1. Split the interest down the middle
2. Apply each spouse’s interest savings allowance to their piece
3. Pay tax separately.

Example

• Spouse 1: basic rate taxpayer – gets £1,000 of personal savings allowance
• Spouse 2: higher rate taxpayer – gets £500 tax-free
• Interest: £2,000 – half “belongs” to spouse 1, half to spouse 2.

Then:

• Spouse 1 pays no tax (uses the entire savings allowance)
• Spouse 2 needs to pay tax on £500 at the higher rate (40%).

What if we don’t want to split the interest 50-50?

You need to prove that you use a different split (for example, one partner put more money in, etc.)

Call HMRC at:

• If you live in the UK: 0300 200 3300
• If you live abroad: +44 135 535 9022