We study the quantum dynamics of a binary mixture of Bose-Einstein condensates (BEC) in a double-well potential starting from a two-mode Bose-Hubbard Hamiltonian. Focussing on the regime where the number of atoms is very large, a mapping onto a SU(2) spin problem together with a Holstein-Primakoff transformation is performed. The quantum evolution of the number difference of bosons between the two wells is investigated for different initial conditions, which range from the case of a small imbalance between the two wells to a coherent spin state. The results show an instability towards a phase-separation above a critical positive value of the interspecies interaction while the system evolves towards a coherent tunneling regime for negative interspecies interactions. A comparison with a semiclassical approach is discussed together with some implications on the experimental realization of phase separation with cold atoms.