Last updated: 14 October 2026
Is interest on a joint bank account always split equally?
For married couples and civil partners living together, HMRC treats interest on a joint account as split 50:50 by default, whoever paid the money in. If the money genuinely belongs to you in unequal shares, you can be taxed on your actual shares by making a Form 17 declaration. For unmarried joint account holders, such as a parent and adult child, each person is taxed on the share of the interest that reflects their actual ownership of the money.
How joint account interest is taxed
| Account holders | Default treatment | Can it be changed? |
| Spouses or civil partners living together | 50:50 | Yes, to actual shares with Form 17 |
| Unmarried couple | Actual beneficial ownership | Based on who owns the money |
| Parent and adult child | Actual beneficial ownership | Based on who owns the money |
| Parent and minor child | Parent taxed if the child’s share came from the parent and interest is over £100 | No |
Form 17
- Only for spouses and civil partners
- The money must already be owned unequally, evidenced, for example, by a declaration of trust
- Send the form within 60 days of signing
- Applies from the date of the declaration
Personal Savings Allowance
Each person has their own allowance:
- £1,000 for basic-rate taxpayers
- £500 for higher-rate taxpayers
- £0 for additional-rate taxpayers
Plus a starting rate for savings of up to £5,000 for those with low other income. From April 2027, savings income tax rates rise to 22%, 42% and 47%.
Example
Olivia and James are married and have £80,000 in a joint savings account earning 4% interest, £3,200 a year. James is a higher-rate taxpayer and Olivia earns £15,000. Under the 50:50 rule, each is taxed on £1,600. James pays 40% on £1,100 (after his £500 allowance): £440. Olivia pays nothing, as her £1,600 is covered by the starting rate for savings (£2,570 is available to her, because her income is £2,430 above the Personal Allowance). If the money were moved into Olivia’s sole name, her £3,200 of interest would be covered by the starting rate and her £1,000 allowance, saving the couple £440 a year.
Changing ownership
Gifts between spouses are free of IHT and CGT. Moving savings to the spouse with the lower tax rate is a simple way to cut tax, but the gift must be outright.
Banks and HMRC
Banks report interest to HMRC each year. HMRC may adjust your tax code to collect tax on savings interest if it exceeds your allowances.
Common mistakes
- Both spouses reporting all of the interest, or neither reporting it
- Sending Form 17 when the money is jointly owned in equal shares
- Assuming a parent and adult child can split interest however they like
- Forgetting that a transfer to a spouse must be a genuine gift to change who is taxed
Frequently asked questions
Who should report the interest on a tax return?
Each holder reports their share.
Can we split 90:10 if we’re married?
Only if the money is truly owned that way and you use Form 17.
What about ISAs?
ISAs can’t be held jointly.
Does it matter who paid in the money?
For spouses, not by default; for others, yes.
Related: interest on bonds bought in family names, tax on savings interest and Form 17 for landlords.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with tax on savings and joint accounts. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
