Bank accounts

dan411

Needing help please: 

working through probate forms currently and it’s saying about bank accounts/joint bank accounts. We have a letter from a bank that states that 2 bank accounts do not form part of the estate as they were joint (father and Daughter) 
because of this letter, does that mean I do not include them within the IHT forms as I have proof that they do not need to be included? 

Thank you 

poppystar

The IHT guidance is directed at ascertaining whether the account was genuinely joint or for convenience, for which you need to look at who paid into the account. I had a joint account with my father which worked well and gave an immediate pocket of money that could be used post death. All of that account was funded by my father and I declared all of the money in it as part of his estate following the guidance. The bank look at the issue differently because they are not considering the IHT aspect just who now has ownership of the account. The letter you have from them therefore does not answer the IHT question asked of you on the forms. 

Keep_pedalling

Joint accounts form part of the estate for IHT purposes. Usually 50% but if these were convenience accounts that the deceased contributed all the funds then you include 100%

user1977

dan411 said:

a bank that states that 2 bank accounts do not form part of the estate as they were joint 

If that's literally what the bank said (is it?) then that's rather shoddy of them - they probably mean "we don't need probate in order to transfer the accounts to the joint accountholder", but the money in the accounts (to the extent it belonged to the deceased) does form part of the estate so still needs to be declared for IHT purposes.

Slowplod

Joint accounts are included for the IHT figures (either full amount or half depending who has paid the money into the account) but the full amount is then deducted from the IHT figures to work out the probate figures.  

bobster2

dan411 said:

Needing help please: 

working through probate forms currently and it’s saying about bank accounts/joint bank accounts. We have a letter from a bank that states that 2 bank accounts do not form part of the estate as they were joint (father and Daughter) 
because of this letter, does that mean I do not include them within the IHT forms as I have proof that they do not need to be included? 

Thank you 

Banks don't decided what forms part of an estate for IHT purposes.

The letter probably just says that the joint account holder doesn't need probate / letters of administration to access the funds.

pjs493

Perhaps some of the confusion is coming from the assumption that a joint account is often for a married couple with shared finances. So for example, when my husband died, everything in our joint accounts automatically became mine and I could continue using the accounts without interruption. Whilst my husband was the major earner in our household (because I was the main child carer and therefore not working as many hours) we were financially co-dependant. 

In situations where an adult child is added to the account of an elderly parent for the convenience of being able to help them with their finances in advanced age, do grocery shopping for them, etc, the situation is a bit different. If this is your situation I’d include the funds in your calculations. In the case of my husband and I, I didn’t include the funds as the money was completely joint and we both contributed to the accounts. Likewise, when working out the value of his estate I took into consideration jointly owned marital assets and used half the value of such items. A flat he bought many years ago before we were married and remained in his sole name I counted as a sole asset of his.