Joint ISAs and Couples: How It Really Works

Couples often ask how to open a joint ISA. The short answer is that you cannot - ISAs are individual accounts by law. But that is not bad news. As a couple you have two allowances and several planning moves that a single person does not, and used well they are more powerful than any joint account would be.

Why there's no such thing as a joint ISA

The "I" in ISA stands for Individual. Every ISA belongs to one person, is funded from one person's allowance and is held in one person's name. There is no joint version, and you cannot pool your allowance with a partner into a single account.

What couples can do is hold an ISA each and plan around the pair of them. For most households that is the better outcome anyway.

Two allowances, one plan

Each adult has a £20,000 ISA allowance, so a couple can shelter £40,000 a year between them. The practical moves:

• Fill both ISAs before using a taxable account. Every pound wrapped is a pound shielded from future CGT and dividend tax.
• Move money to the lower earner's wrapper. Transfers between spouses and civil partners are normally free of capital gains tax, so you can shift unwrapped holdings to whoever has spare ISA allowance or a lower tax band before selling. This pairs well with Bed and ISA.
• Use both dividend and CGT allowances. Holding taxable investments across two names doubles the tax-free dividend and gains allowances available to the household.

Lifetime ISAs as a couple

If you are buying a first home together and you are both eligible, you can each hold a Lifetime ISA and each earn the 25% bonus on up to £4,000 a year - up to £2,000 a year of free money between you towards the same property. The £450,000 property price cap applies to the home, not per person.

What happens to an ISA when someone dies?

There is one place the rules do recognise couples. When an ISA holder dies, their spouse or civil partner inherits an additional permitted subscription - an extra one-off allowance equal to the value of the deceased's ISAs, on top of their own. It means the tax-free status is not lost on death, which is worth knowing when planning as a couple.

The takeaway

Forget the joint ISA - it does not exist. Think instead about your two allowances as one household plan: fill both wrappers, shift assets to the partner who can shelter them best, and use both sets of allowances every year. That is the real couples' advantage.