Implications of becoming named on fathers accounts

numptyknownothing

My father-in-law has suffered some major health problems over the last 18mths that have left him increasingly confused. Not completely doolally (as the technical term might be) but after his heart attack he was noticeably less sharp and has just had another medical episode that has also dulled his wit. He is relatively well at present.

My husband and his father discussed things after the heart attack and had a LPA put in place for both medication and finances. They are now discussing the option to have my husband named on his fathers bank accounts/savings/bonds etc. It is purely to enable my husband to help administer the accounts should his father be incapable of doing things for himself. He would not access any funds other than transfers from one to the other at his fathers request. We would not profit or benefit in any way.

My question is would my husband be liable for some form of tax or have to disclose this to HMRC? Someone in one of the banks they went to see today mentioned something in passing that has left us wondering if this is such a good idea.

Many thanks in anticipation of your help.

Some background if needed - My husband is an only child and executor of his fathers will. His fathers estate is in the region of £400k in total. His house is worth approx. £250k with £150k in various savings accounts. We understand there will be IHT and CGT should we not sell his house straight away upon his demise but do not want to be responsible for anything right now other than to help him with the admin when asked.

DaveTheMus

numptyknownothing wrote: »

My father-in-law has suffered some major health problems over the last 18mths that have left him increasingly confused. Not completely doolally (as the technical term might be) but after his heart attack he was noticeably less sharp and has just had another medical episode that has also dulled his wit. He is relatively well at present.

My husband and his father discussed things after the heart attack and had a LPA put in place for both medication and finances. They are now discussing the option to have my husband named on his fathers bank accounts/savings/bonds etc. It is purely to enable my husband to help administer the accounts should his father be incapable of doing things for himself. He would not access any funds other than transfers from one to the other at his fathers request. We would not profit or benefit in any way.

My question is would my husband be liable for some form of tax or have to disclose this to HMRC? Someone in one of the banks they went to see today mentioned something in passing that has left us wondering if this is such a good idea.

Many thanks in anticipation of your help.

Some background if needed - My husband is an only child and executor of his fathers will. His fathers estate is in the region of £400k in total. His house is worth approx. £250k with £150k in various savings accounts. We understand there will be IHT and CGT should we not sell his house straight away upon his demise but do not want to be responsible for anything right now other than to help him with the admin when asked.

If you don't do it, who else will?

pollypenny

When my father went into residential care he made me a signatory on his accounts. They were his alone, though.

OH and I are signatories on DS's British current account, which he keeps simply to pay his professional fees,

There's no liability involved.

troubleinparadise

If you already have the LPA sorted, if not yet activated, then that would give your husband authority to control his father's accounts should he lose the capacity to do so himself.

Why would you want to set up a second duplicate system?

nom_de_plume

numptyknownothing wrote: »

...... It is purely to enable my husband to help administer the accounts should his father be incapable of doing things for himself....We would not profit or benefit in any way.

My question is would my husband be liable for some form of tax or have to disclose this to HMRC? Someone in one of the banks they went to see today mentioned something in passing that has left us wondering if this is such a good idea.

There would be no tax implications in this scenario and no need to inform HMRC.

If you father in law paid your OH for his service then there would be tax implications on those payments. If he chose to give him the odd cash gift for his help that is not taxable.

dzug1

As attorney your husband has the authority to operate his father's bank accounts. He might be expected to do his father's income tax returns but has no personal tax liability


To exercise that authority he needs to register the LPA with the bank. Take (not send - you want it back) with ID for both donor and attorney and it should all be sorted out. I hesitate to say on the spot but banks have improved their procedures


Having him 'named' on the accounts as well is totally unnecessary and could lead to them being designated joint accounts which would have tax implications.


I'd say for any accounts that don't require active management it's not worth registering the LPA for as long as your father can still sign his name.

getmore4less

No tax implications if the funds are the fathers even if joint accounts.

names signee is another option.

useful interim option so you don't have to exercise the LPA but can still assist.

Is there a spouse transferable nil rate band available to mitigate the IHT(upto £650k) if not then time for some spending making his life better.

CGT only comes into play if the value of any property rises after death.

madbadrob

I am a joint signatory on my mums bank accounts just in case she becomes ill and cant get to the bank. We have no LPA in place as my mum is still very compus mentis and more so than myself :P We have no issues for tax as the money is her own and the tax she has to pay on any interest is deducted at source.

Rob

numptyknownothing

Thanks all for your advice and help. It was only a throw away comment in the bank that even made us wonder. It was my father-in-law's idea for my husband to be able to help him if he doesn't want the stress of asking things in the bank and then not grasping the information straight away. He's aware that he is a little slower to understand and remember things.


GETMORE4LESS - unfortunately my husbands mum died some years ago and they were divorced at the time anyway. Thanks for the thought though. We would happily see him spend, spend, spend but he says he's got everything he wants and is not used to spending money for the sake of it.




Thanks again for all your responses and suggestions.