I pay income tax at 40%, but my wife and child have no income at all. If I buy fixed income bonds in their names will the interest be effectively tax free, as it will be covered by their personal allowances?
When you buy the bonds in the names of your relatives you will be giving them the capital you invest, as they will have complete control of the bonds. There is no limit on the amount you can give to your spouse, although there could be inheritance tax implications. Your wife will be taxed on the interest from her bond, but if this does not exceed her personal allowance of £6,475, there will be no tax to pay. If your child is aged under 18, the interest from his bond will be taxed as part of your income if it exceeds £100 per year.