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Rules about joint accounts...can you help
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hexham1_2
Posts: 9 Forumite
Hi I need advice quickly. I have just opened 2 fixed rate bonds with Coventry BS with 50k in each (I sold my house recently). OK I am in the cooling off period so I may cancel one and go to another institution to be covered by FSA. Coventry tell me that one option is to make them both joint accounts and be covered for the full 100k. Ok but as I am single, I would probably have to use my sister or nephew or neice or combination. These are my nearest relatives. Is this allowed? Will there be any consequences of this other than Inheritance tax if I die within 7 years or whatever the rule is. (My sister would inherit anyway). Any advice would be appreciated.;)
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Comments
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It's allowed. (except money laundering ID might be mildly troublesome?)
But you are gifting potentially the whole £100k if you make both joint. Or £50k if you put one of the accounts in another name! Very unwise.
Either bite the bullet and leave both deposits in your name ...or, more sensibly .... opt out one of the deposits to elsewhere under the cooling off period.If you want to test the depth of the water .........don't use both feet !0 -
It's allowed. (except money laundering ID might be mildly troublesome?)
But you are gifting potentially the whole £100k if you make both joint. Or £50k if you put one of the accounts in another name! Very unwise.
Either bite the bullet and leave both deposits in your name ...or, more sensibly .... opt out one of the deposits to elsewhere under the cooling off period.
Yes I guess you are right.. just needed a second opinion. Which one would YOU keep... 2 year or 3 year... both are at 3.75%??0 -
The 1 year !
But if that's not a choice ..... don't go above 2 year at those rates.If you want to test the depth of the water .........don't use both feet !0 -
Irrelevant to the OP since a sensible decision has already been made but this part of your post got me wondering whether it would be a 50k or 100k gift.But you are gifting potentially the whole £100k if you make both joint.
Certainly the co-owner could quite legitimately walk off with 100k if they so wished so absolute trust would be required.
But does that mean a gift of 100k?
Half the value of joint accounts are treated as belonging to the deceased for IHT purposes so my natural instinct is to say that the 'true' gift was 50k.
I do agree that the idea was unwise for the above reason but also I would have been concerned with the potential for the co-owner to have marital difficulties or face bankruptcy. 50k of OP's money then potentially at risk.0 -
If upon the death of either party, then if the estate is valued above the nil rate band, then an account will need to be submitted to the Revenue. Where an account is submitted, and assets held jointly, the following information will need to be provided to the best of the personal representative's knowledge:
- who the other joint owner is, and their relationship to the deceased
- when the item was acquired
- how much each joint owner provided to acquire the item
- who received the income or interest if there was any
- who received the benefit of any withdrawals from bank accounts if any were made
- whether the item passes to the joint owner by survivorship or under the Will
Questions will potentially arise as to an element of gift on opening of the account, and it's also possible that the revenue might argue that the reservation of benefit rules apply to the gift.
Aside from the practical points that Sloughflint has raised, if you don't want your PRs being bogged down by tricky questions from the revenue when you die, I would steer clear from the joint account route.[FONT="]Public wealth warning![/FONT][FONT="] It's not compulsory for solicitors or Willwriters to pass an exam in writing Wills - probably the most important thing you’ll ever sign.[/FONT]
[FONT="]Membership of the Institute of Professional Willwriters is acquired by passing an entrance exam and complying with an OFT endorsed code of practice, and I declare myself a member.[/FONT]0 -
I wouldn't keep more than £50K in one institution as I'm not a gambler.Coventry tell me that one option is to make them both joint accounts and be covered for the full 100k.
Interested to hear that Coventry would let you change the accounts to joint names.
I have £50K in the Coventry 50 Plus eSave (5), which is fixed at 6.25% for a year. Finishes November I think. The beauty of this account is that I can add and withdraw without penalty. Obviously, I'm not interested in withdrawing.
I would like to know though, if I could change this account to joint names.
My husband is a 40% tax payer (hence all savings in my name) due to retire in next month. If I could add his name to the account I could then add another £50K to it.
I imagine though, that you have been offered the 'change' to joint as you're still in the cooling off period.
Hmm, I might just send an email though, enquiring. Nothing to lose eh?0
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