joint accounts

propertyrental

An unmarried couple have a joint current account. On the death of one, what happens to that account?

Does the full amount get included in the Estate for IHT purposes? 50%?

And what about the Beneficiaries of the Will? Is all or part of that amount distributed?

Thanks!

McKneff

If one of the joint account holders passes away all the monies in the account belong to the surviving account holder. Simple as that 

buddy9

McKneff said:

If one of the joint account holders passes away all the monies in the account belong to the surviving account holder. Simple as that 

unless the deceased is domiciled in Scotland.

bobster2

It is more complex than this.

Money in joint accounts can form part of the estate and be subject to inheritance tax in some contexts.

https://www.thegazette.co.uk/wills-and-probate/content/103479

Are there inheritance tax implications when a joint bank account holder dies?

HMRC asks detailed questions about joint accounts on the inheritance tax return, which is submitted as part of the application for probate or letters of administration when someone dies.

Whilst HMRC may not be too concerned about the ownership of joint accounts held by spouses or civil partners (as such transfers would be exempt from inheritance tax), they will look more closely at accounts held by others, such as unmarried couples and parents and children.

Rather than simply assuming each account holder is entitled to an equal share of the funds, HMRC usually treats account holders as owning a share of the funds which is proportionate to their contributions to the account. For example, if one account holder provided all the funds, the whole balance of the account will be treated as belonging to him or her on death, and potentially subject to inheritance tax.

Withdrawals from the account will usually be set against that person’s own contributions as far as possible.  Withdrawals which exceed a person’s own contributions may be treated as a lifetime gift from the other account holder, which could have inheritance tax consequences.

Inheritance tax due on death which is attributable to the funds in a joint account is payable by the surviving account holder who has inherited funds by survivorship (rather than necessarily from the deceased’s estate), unless there is wording to the contrary in any will made by the deceased.

Keep_pedalling

Assuming the couple live in England or Wales then as a general rule 50% of the account forms part of their estate for IHT purposes, but the surviving account holder will be the sole owner of the account so it is not covered by the will. 

There are exceptions to this, for example,  a joint account held for convenience where just one person had funded it.