Joint bank account with mum?

fluffnutter

Isn't this a massive IHT loophole then? I could open a joint account with my dad, he sticks his million pounds in it (he wishes!) and when he dies, I get the money with no IHT liability??

Seems a little odd...

dandy-candy

McKneff wrote: »

No you dont, fluffnutter is correct.

On a joint account, if one of the joint holders dies the money automatically becomes the other holder(s)

No question.

Sorry but you're wrong here. Our mum died in April and on the forms there is a specific section asking about jointly held assets.
Op if you wouldn't find it too upsetting, you might want to buy a book on probate because the forms are mammoth and complicated.
Like I say we had the same situation, my mum and sis had a joint account and it DOES have to be declared. The tax office are very very efficient and can drag you through Hell if they think something iffy is going on so be sure to fill in the forms right.

dandy-candy

Sorry just to make it clear - you only pay IHT on what they put in. So say the account had 50K and they put in 35K and you put in 15K then you only pay IHT on the 35K.
They specifically asks how much is the deceased.

dandy-candy

fluffnutter wrote: »

Isn't this a massive IHT loophole then? I could open a joint account with my dad, he sticks his million pounds in it (he wishes!) and when he dies, I get the money with no IHT liability??

Seems a little odd...

Exactly - it doesn't happen that way. The tax office is very on the ball - more's the pity!

fluffnutter

dandy-candy wrote: »

Sorry but you're wrong here. Our mum died in April and on the forms there is a specific section asking about jointly held assets.
Op if you wouldn't find it too upsetting, you might want to buy a book on probate because the forms are mammoth and complicated.
Like I say we had the same situation, my mum and sis had a joint account and it DOES have to be declared. The tax office are very very efficient and can drag you through Hell if they think something iffy is going on so be sure to fill in the forms right.

So why does the directgov website give the advice it does? It clearly states that money held in joint accounts doesn't form part of the estate.

Looking into this in more detail, it would appear that you have to specify what happens when one account holder dies. It cannot be assumed that the balance is automatically passed to the surviving holder. If this is not specified, the monies will form part of the estate. The advice is to clearly specify on what grounds the account has been opened and what is to happen should one holder die, and for this written instruction to be held with the wills.

What's not clear to me however is whether the money that automatically becomes the surviving holder's is treated as a gift or not (gifts can be subject to IHT depending on size).

Frustratingly the only example I can find involves the proceeds of a house sale. There are specific rules around property inheritance so it's not a particularly useful example.

OP, you might find this useful.

fluffnutter

dandy-candy wrote: »

Exactly - it doesn't happen that way. The tax office is very on the ball - more's the pity!

I think it can happen this way. It just needs to be specified. If the OP chooses to do this, legal advice should be sort regarding the full implication of any IHT laws that might apply.

pearl123

Fluffnutter - thank you so much for the detail on money in joint accounts. My parents had a joint account and I'm just getting the paperwork together for probate. And you info has really helped.
Thank you once again.

pollypenny

OP, your mum can make you a signatory on her account.

I was so for my father and managed his account to pay care home fees and house expenses while we had it.

As DS lives in the US, OH and I are signatories on the current account he keeps to pay his professional fees.

[Deleted User]

fluffnutter wrote: »

What's the objection with getting lasting power of attorney? It allows you far more control and support than simply having a joint account. E.g. does she own a house? What are her desires regarding her welfare should she be unable to look after herself? What about her bills? Savings account? Investments? Pension? You won't be able to help with any of these merely by holding a current account together. But you would if you were her attorney. It's really straightforward and costs nothing.

Sorry to hear about your mum Della.

You got me thinking about this and that I should do it, I just looked online and it looks like it costs £130 to lodge each application (there is a property and financial affairs poa and a health and welfare one). Below copied from Direct.gov (but there are some exemptions if you claim certain benefits)

Lasting Power of Attorney application to register fee


When you apply to register your Lasting Power of Attorney, there is a fee of £130.
This fee is separate for each Lasting Power of Attorney you apply to register with the Office of the Public Guardian. For example, it costs £260 to apply to register both a health and welfare and a property and financial affairs Lasting Power of Attorney. The cost covers the work involved in processing an application, checking the documents, issuing notices and notifying applicants if there are any errors.

fluffnutter

goochie wrote: »

Sorry to hear about your mum Della.

You got me thinking about this and that I should do it, I just looked online and it looks like it costs £130 to lodge each application (there is a property and financial affairs poa and a health and welfare one). Below copied from Direct.gov (but there are some exemptions if you claim certain benefits)

Lasting Power of Attorney application to register fee


When you apply to register your Lasting Power of Attorney, there is a fee of £130.
This fee is separate for each Lasting Power of Attorney you apply to register with the Office of the Public Guardian. For example, it costs £260 to apply to register both a health and welfare and a property and financial affairs Lasting Power of Attorney. The cost covers the work involved in processing an application, checking the documents, issuing notices and notifying applicants if there are any errors.

My mistake regarding the cost. I'd assumed that, as you don't need this arranged by a solicitor it would be fee-free. I'd overlooked the cost of registration. Thanks for correcting me.