Tax on interest - joint accounts

interest_Ted

I have always understood that interest on joint accounts is assumed to be split equally among the parties and therefore the tax liability on such interest is strictly according to the share of interest received.

I have just met a situation where a second named person has been added to an interest bearing savings account which was previously a sole account. The second named has not placed any money into the account but has been added merely to act as a kind of trustee to handle the movement of money for the first named (who is in a jungle and has no internet access to the account for several months on end) and in case of emergency.

The first named is a standard rate tax payer and the second named is a higher rate tax payer.

Does anyone know if it is possible for the parties to declare to the tax office, or to the bank, or to both, that the capital is owned by the first named and interest should only be paid to the first named (even though it is paid into the joint account), so that the second named does not get hit for tax on money that she does not really own.

At first I thought no, as the ownership appears to become shared as soon as the account is opened but I cannot find any clear direction on this from HMRC website. If the parties were married etc., I would be certain the split could not be changed from 50/50. but this is a mother/daughter relationship, so I am beginning to think it might be possible, and might only need a declaration, and possibly the cooperation of the bank.

Has anyone met this before and if so, know the answer ?

Thanks Ted