Married couples and civil partners often fail to take advantage of various reliefs and allowances by organising their finances well, said Emma Simon in The Daily Telegraph.
For example, if one partner pays a lower tax rate, income-producing assets such as shares, investment funds, bank accounts and jointly owned property should be put in their name so as to pay less tax on dividends, rent and interest. If you are unmarried, do remember that transferring assets could potentially trigger a capital-gains tax bill.
Also, keep in mind that there are situations in which joint ownership is preferable, depending on “how much annual income they generate, when you are likely to sell them and the size of the potential gain”. For 2010-11, the CGT allowance is £10,100 and basic-rate taxpayers pay CGT at 18% rather than 28%.
But when calculating CGT, the gain realised is added to the income earned in that tax year. This means that “people realising ‘lumpy’ assets such as a second home, are usually better off jointly owning the asset to take advantage of two CGT allowances”.