»Ê¹ÚÌåÓýapp

Who is taxable: examples

Example 1

Harriet holds a portfolio of quoted company bonds through a nominee. Although the nominee’s name appears on the companies� registers of bond-holders, Harriet is the beneficial owner of the bonds and the person entitled to the interest arising from them. Harriet is therefore chargeable to tax on the interest.

Example 2

Mehta and her former husband Ian, receive the decree absolute on 29 December 2016. On 5 December 2016, a Court Order is made ordering Mehta to transfer certain assets to Ian. »Ê¹ÚÌåÓýappse include a building society account in Ian’s sole name. On 31 December, interest of £2,400 is credited to the building society account. On 2 January 2017, Mehta writes to the building society asking them to change the account from her name to Ian’s, and the building society acts on the request a week later.

Beneficial ownership of the account is transferred when the Court Order is made on 5 December 2016, even though the name on the account is not changed until later. (See the guidance at on when assets are transferred on divorce or dissolution of a civil partnership - although this applies for capital gains tax purposes, HMRC would take a similar view where entitlement to interest is concerned.)

Ian is therefore the person who is entitled to, and taxable on, the interest that is paid on 31 December 2016. »Ê¹ÚÌåÓýappre is no question of apportioning the interest for her period of ownership of the account - see SAIM2420.