Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • bouicca21
    • By bouicca21 17th May 17, 8:42 AM
    • 3,098Posts
    • 3,825Thanks
    bouicca21
    Joint account and inheritance tax?
    • #1
    • 17th May 17, 8:42 AM
    Joint account and inheritance tax? 17th May 17 at 8:42 AM
    Because I live in London my modest home is worth a tad more than the inheritance tax threshold, so any savings will be taxable. I have been wondering about putting some money into a joint account with my children. This would become theirs on my death - but would it go under the rules for gifts?
Page 1
    • Alter ego
    • By Alter ego 17th May 17, 8:48 AM
    • 2,074 Posts
    • 1,985 Thanks
    Alter ego
    • #2
    • 17th May 17, 8:48 AM
    • #2
    • 17th May 17, 8:48 AM
    It would become their's immediately. Not on your death. OK so long as you trust them.
    Ignore me if you like, it's not the real me anyway.
    • Yorkshireman99
    • By Yorkshireman99 17th May 17, 8:55 AM
    • 2,963 Posts
    • 2,319 Thanks
    Yorkshireman99
    • #3
    • 17th May 17, 8:55 AM
    • #3
    • 17th May 17, 8:55 AM
    Because I live in London my modest home is worth a tad more than the inheritance tax threshold, so any savings will be taxable. I have been wondering about putting some money into a joint account with my children. This would become theirs on my death - but would it go under the rules for gifts?
    Originally posted by bouicca21
    HMR&C are wise to this sort of thing. Gifts made less than seven years before death get added back to the estate value. Part of the joint account will be regarded as part of your estate anyway. Then there is the question of what happns if you children die, divorce or become bankrupt or even decide to spend it all. All in all a bad idea.
    • securityguy
    • By securityguy 17th May 17, 9:06 AM
    • 2,406 Posts
    • 3,653 Thanks
    securityguy
    • #4
    • 17th May 17, 9:06 AM
    • #4
    • 17th May 17, 9:06 AM
    Because I live in London my modest home is worth a tad more than the inheritance tax threshold, so any savings will be taxable. I have been wondering about putting some money into a joint account with my children. This would become theirs on my death - but would it go under the rules for gifts?
    Originally posted by bouicca21
    If you want to give it to them, give it to them. I think I am right in saying that not only does a joint account have all the problems people have listed in event of divorce or relationship breakdown (you with them, as well), but would be entirely ineffective as an IHT dodge because the gift would be deemed to have taken place at the point of your death and therefore fall completely within your estate anyway (because it's a "gift with reservations" as you can spend the money yourself at any point).

    If you give them the money absolutely, and live seven years, then it falls outside IHT. And no imaginable case could be made for someone who retained assets taking them to the edge of IHT being guilty of deprivation of assets, particularly as you (presumably) are not on the threshold of requiring care. If minimising IHT is your intent, then you need to give away assets absolutely, more then seven years before death, and ideally with clear blue water between the gift and any suggestion that you might require funded care.
    • bouicca21
    • By bouicca21 17th May 17, 2:58 PM
    • 3,098 Posts
    • 3,825 Thanks
    bouicca21
    • #5
    • 17th May 17, 2:58 PM
    • #5
    • 17th May 17, 2:58 PM
    Ta muchly. I sort of thought that might be the answer, but I was also thinking of ease of access for when they have to pay for my funeral, which with any luck won't be any time soon.
    • Yorkshireman99
    • By Yorkshireman99 17th May 17, 3:24 PM
    • 2,963 Posts
    • 2,319 Thanks
    Yorkshireman99
    • #6
    • 17th May 17, 3:24 PM
    • #6
    • 17th May 17, 3:24 PM
    The bank will allow access for that reason anyway!
    • Mojisola
    • By Mojisola 17th May 17, 3:25 PM
    • 28,221 Posts
    • 71,789 Thanks
    Mojisola
    • #7
    • 17th May 17, 3:25 PM
    • #7
    • 17th May 17, 3:25 PM
    Ta muchly. I sort of thought that might be the answer, but I was also thinking of ease of access for when they have to pay for my funeral, which with any luck won't be any time soon.
    Originally posted by bouicca21
    All they have to do is get the funeral director to send the bill to the bank and it will be paid from your account.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

244Posts Today

1,817Users online

Martin's Twitter
  • Shana tova umetuka - a sweet Jewish New Year to all celebrating. I won't be online the rest of t'week, as I take the time to be with family

  • Dear Steve. Please note doing a poll to ask people's opinion does not in itself imply an opinion! https://t.co/UGvWlMURxy

  • Luciana is on the advisory board of @mmhpi (we have MPs from most parties) https://t.co/n99NAxGAAQ

  • Follow Martin