Moving money from a joint account

daveconnects

I am sure my dad is wrong about this! 
My mum and dad had a joint account with most of their savings in it. They opened new bank accounts in individual names and put half in each. For some reason now, my dad is worrying about some sort of tax implications as a result and he is talking about gifting or something.
Surely this isn't the case?! 

Can anyone offer any thoughts on this. He and my mum were looking to move money back into a joint account now. Surely he is wrong and moving your own money from a joint account to individual accounts then back to joint accounts has no tax implications?

Thanks in advance.

Brewer20

I move money around from my joint to my sole accounts. Probably not more than a few hundred but it has been known to be thousands. So it's their money they can do that. You only pay tax on any interest earned that is over £1k I believe, or it used to be.
If it's a sizeable amount then they should really be in an account that gives interest rather than one that doesn't. I know it's a paltry amount of interest now but worth investigating.

daveconnects

Thanks. For some reason, my dad had it in his head that by moving his and mum's money into sole accounts from their joint accounts could be considered under gifting and subject to the no more than £3k gift rules or something. I tried to say to my dad surely you can't pay gift tax on money he and my mum are paying themselves!

VXman

I suppose if you moved a chunk of money from one sole named account to another it could be lookedon as gifting if there was no other justifiable reason for it. HOWEVER, I don't think gifting between married partners exists. Finances would be considered as joint I would have thought. Anyway that's the way I've looked at it over 15 years of moving money around multiple sole and joint accounts. No one has ever questioned it. In fact no one has questioned six figure numbers coming into my account from our time working abroad. I do wonder if HMRC would ever notice anything in bog standard domestic accounts.

Grumpy_chap

Both your parents can move money between their own individual accounts and joints accounts at will and with no tax implications.  

Why did you parents want to split money from joint accounts to sole accounts?
Is this because of reaching the stage where care-home or similar needs to be planned for?  In this case, separate accounts can be prudent as the way joint assets are treated for assessing eligibility for state support is not equitable IMO:

• Limit on state funding £23k
• One of a couple need a care home
• Couple with £60k in joint account, assessed as £30k each.  This seems correct.
• One in care home gets no state funding because >£23k
• One in care home pays first month fee £1k
• Balance remaining in the joint account £59k, assessed as £29.5k each.  This is where it starts to get inequitable.
• State funding does not start until the balance in the joint account has dropped below £46k, assessed as £23k each.

If, however, there are two separate accounts in sole names:

• Both partners start with £30k each in sole accounts, still the same joint total £60k
• After one month, paid £1k from the sole account, leaving £29k.  The second partner's £30k still £30k.
• State funding starts once the sole account balance drops to £23k.  The second account still £30k.  Total between the couple at £53k

Brewer20

daveconnects said:

Thanks. For some reason, my dad had it in his head that by moving his and mum's money into sole accounts from their joint accounts could be considered under gifting and subject to the no more than £3k gift rules or something. I tried to say to my dad surely you can't pay gift tax on money he and my mum are paying themselves!

In my earlier post I assumed bank current accounts they had the money in or it could one earning interest, ie savings account.

Sea_Shell

I didn't think there were any limits or restrictions on movement of money's between spouses, as far as gifting is concerned.

Eco_Miser

Far from gifts between spouses giving rise to tax, they can actually reduce tax (where the gift is property subject to capital gains tax, and the gift spreads the gain over two CGT allowances).

daveconnects

Can I just thank everyone for their helpful comments on my question. Really grateful thank you.