Joint Bank Account/Gift

Hitting

If a gift is made from a joint bank account electronically by one of the joint holders, will the gift be assessed by HMRC as coming from joint holders or that holder actually initiating the gift?

[Deleted User]

Why would HMRC assess it in the first place?

Hitting

For IHT purposes!

colsten

I reckon it would be considered a gift by both account holders but only the HMRC can tell you how they would treat it.

The threshold is quite high though so your problem might not actually exist https://www.gov.uk/inheritance-tax/gifts

In any case, it would be quite straight forward to move the money to a sole account and send it from there.

Hitting

I think you are suggesting what I was thinking.....gift from each holder of equal value!
I’m not sure why you would think HMRC may have to consider that to be the case?

Keep_pedalling

What sort of gifting are we talking about here, a one off big gift, annual IHT exempt allowance, gift in contemplation of marriage or gifting of excess income?

Gifts from joint accounts can be joint or singular. For instance you can make someone a gift of £6000 as a joint gift and it will cover both of your annual allowances, but if you are gifting someone £4000 a year out of your excess income then it is just coming from one of the holders.

The important thing about reducing potential IHT through gifting is that you keep meticulous records of you gifting. We have a a spreadsheet documenting the last 7 years gifting, and we keep a copy of this with a copy of our wills. As a back-up we email an update to that SS to the solicitor who holds the original will. Without this your executors are going to struggle with winding up your estate.

Hitting

Accepting all the gifting allowances available.the gifting I have in mind is that subject to 7year rule.
You refer to a spreadsheet, but that is personal to you,..ie no proof of actual gifting!
My original query...is my gift a joint gift or sole gift?....if done electronically, would a printout of the transaction be sufficient proof.....
and the fact that the printout would have my name on it, but from a joint account, would be seen as a joint gift?

xylophone

It seems to me that if you want it to be seen as a sole gift with no complications, move the money from the joint account to your sole account and gift from that.

Keep_pedalling

Hitting wrote: »

Accepting all the gifting allowances available.the gifting I have in mind is that subject to 7year rule.
You refer to a spreadsheet, but that is personal to you,..ie no proof of actual gifting!
My original query...is my gift a joint gift or sole gift?....if done electronically, would a printout of the transaction be sufficient proof.....
and the fact that the printout would have my name on it, but from a joint account, would be seen as a joint gift?

The spreadsheet backs up actual bank statements. An executor has no idea of what payments were for. Apart from who gave the money, there is the issue of was this a gift or a loan, or even was it a repayment of a loan or your share of a holiday they booked for a group.

Even if you are paying out of solo accounts you need to keep separate records to avoid your executor having a major headache understanding what payments are gifts and what are not.

It seems you are looking at making more substantial gifts, so I would also recommend you look at term life insurance that would cover tax on PET gifts should you meet an untimely end. If you are not too old and in good health it is quite cheap .