Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
Quickfire Roundup:
We’re sorry to burst your bubble but unfortunately not, no. The current ISA rules state you can’t have a joint ISA account, but there is some upside because if you both have ISAs, you can save more money together.Â
We get it, and it isn’t ideal because, as a couple, you want to work together on your money. There are joint bank accounts, mortgages and insurance policies, but ISAs still remain a personal product.
That being said, if you’re smart about it and trust your partner, you can maximise your allowances for the greater good of the household.
In fact, doing so is thoughtful financial planning and increases the tax-free contributions from £20,000 to £40,000.
Table of Contents
Can you have a joint ISA - No! But why?
ISAs or individual savings accounts, as they’re also known, are precisely that, for the individual.Â
It would require a name change away from the individual and a lot of legislation to adapt these personal savings accounts.
The five main types of ISA are:
Cash ISAs
Cash ISAs are savings accounts with a higher interest rate in most cases than standard high-street banking.Â
There are three main types of Cash ISA: flexible, easy-access and fixed.Â
Fixed is where your money is locked in for a period of time, and the minimum is usually 90 days working up to years. The benefit of this is that you get higher interest rates than flexible or easy-access Cash ISAs.
Stocks and Shares ISAs
This account type allows you to invest in stocks, exchange-traded funds (ETFs), investment trusts, bonds and more via the global markets.
Stocks and Shares ISAs earn an average of 9.7% a year in the UK
You can find both expert managed or self-invested styles of investment ISAs, and each person is unique depending on how involved they want to be.
Lifetime ISA
You can invest up to £4000 each year and receive a 25% government bonus up to £1000 into Lifetime ISAs.
This money can be used to purchase your first home or for retirement. If you withdraw it early, you will lose your accumulated bonus.
Junior ISAÂ
Parents set up these account types for children under 18. You can contribute outside of the £20,000 ISA allowance, with a further £9,000 able to be added per tax year.Â
Once the child turns 18, Junior ISAs are converted into ‘adult ISA’, and the named child can access the funds.
Innovative Finance ISAs (less common)Â
IFISAs are peer-to-peer lending through your ISA accounts. You are essentially loaning another individual the money and receiving the interest on the loan.Â
These accounts are considered higher risk and only opened by more experienced investors.
How to make ISAs work as a couple?
So, we’ve established that a joint ISA doesn’t exist, but you can use the ISA allowance to your advantage.
A great way of putting your finances together is to have a set plan for the ISA contributions. Then you can share the profits and interest if you choose to.
As each person gets £20,000 a year to contribute to their chosen ISAs, this means that with two adults in the household, you can double this to £40,000.
If, for example, you are both looking to buy your first home together, you could combine your Lifetime ISA contributions. This would mean you would get twice the government bonus when doing so.
Can I contribute to more than one ISA type?
You can own an unlimited amount of ISAs, but you can only pay for one type each year.
For example, you could have two Cash ISAs and two Stocks and Shares ISAs, but each year, you could only pay into one type of account.
This would reset each tax year which runs from April to April each year.
Then if you’re not happy with your provider or, for example, find a better interest rate for your Cash ISA elsewhere, you can begin contributing to your new account and initiate an ISA transfer.
Can I pay into my partner's ISA?
This is tricky because the government policy on this needs to be clarified. It currently states that 3rd parties can pay in if the money is the original investor’s.Â
Confusing right?!
However, most ISA providers allow you to contribute to your partner’s ISA if you declare the money as a gift.Â
Technically this means you can’t ask for it back and any profits your partner makes are there’s.
I think this is where a little bit of trust and family estate planning comes into play.Â
Any unused personal allowance could be put to use by making the most of tax-free contributions towards your partner’s ISA allowance. Check with your ISA provider before attempting this, as some have different rules.
You can however have a joint savings account so this is where for couples the argument of ISAs vs Savings Accounts comes into play.
What is bed and spouse and ISA?
Very odd name but ‘Bed and Spouse’ is where a spouse or civil partner can sell investments which the other spouse or partner buys back immediately.Â
This negates capital gains tax as you are not liable for CGT on assets sold to a spouse.
I can hear you thinking what on earth does this mean?Â
Well, put simply, you would only do this if you held investments outside of an ISA and your spouse or partner then bought them off you to keep inside their ISA, which means any gains are then not subject to tax.Â
It’s an intelligent way to plan financially and avoid paying capital gains tax on investments you’ve made outside of an ISA.
FAQs
Can a married couple have two ISAs?
Technically yes, but they must be in their names. You cannot have a Joint ISA as a married couple or when in a relationship.
If you put your ISA allowance together, you will have £40,000 as a household to use towards your savings and investment accounts.
There is no such thing as a Joint ISA, marriage allowance or tax break for having a family member, spouse or civil partnership.
Can I transfer my ISA to my wife's ISA?
You cannot transfer your ISA to your wife or any other person, and this is because the tax benefits for each person are for individuals and cannot be shared between friends, family, spouses or civil partners.
The only way to transfer any value is by selling your investments or closing your savings account and then giving the money to the other person.
What happens to ISAs when someone dies?
It is assigned to your estate and given to the person you leave it to in a will. The executor makes the transfer, and the ISA is closed once complete.
Inheriting an ISA from a spouse or civil partner does not contribute to that year’s ISA tax allowance – it is also not subject to inheritance tax.
Round Up
So can you have a joint ISA? Unfortunately not, but with intelligent estate planning, you can benefit from the more significant contribution of £40,000.
If you’re considering opening a joint bank account, then banks like Monzo and Starling are great, as you can both have cards and a phone app.
This way, you can use the savings pots on there, which are helpful if saving for everyday purchases and more significant items like holidays or Christmas.
If you’re interested in investment platforms then check out our best investing apps here.
Share this article with friends
Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
