Putting savings from a joint account into a Cash ISA in my name.

Guapito

I have a joint current account with my mother which holds around 15k. At the suggestion of my mother, I was added to the account to avoid money being held by the bank, in the event of her death. To give a bit of a back story, when my father passed a few years back, his bank account was frozen for months after his death, causing my mother a lot of anxiety. To avoid this happening after her passing, she suggested the account be changed to a joint account with my name on it.
The account is giving her 0% interest and I'm keen for the money to work for her, so I suggested we open a Cash ISA. I've looked into this but the account the bank are offering can only have one account holder. So I've suggested I open an account, in my name, and transfer it across. She's happy to do this, but I was wondering if there are any tax implications?

JGB1955

Why can't the ISA be in her name?  It's not your money and an ISA is an INDIVIDUAL savings account.  Does it need to be in an ISA?  What is her tax situation?  Does she need to shelter HER money from taxation?  Does she already receive more than £1,000 p.a. in interest?

Keep_pedalling

No, it needs to be in her name. I would also suggest you look at non ISA accounts that can pay more. What is her annual income?

These sort of arrangement are no substitute for having a financial LPA in place, and if she does not have one making one should be a priority.

Guapito

JGB1955 said:

Why can't the ISA be in her name?  It's not your money and an ISA is an INDIVIDUAL savings account.  Does it need to be in an ISA?  What is her tax situation?  Does she need to shelter HER money from taxation?  Does she already receive more than £1,000 p.a. in interest?

As mentioned, its to avoid delays to money being accessed in the event of her death. No, it's not my money but I manage her finances for her and want her money to work for her, rather than sitting in current account that gives zilch.
 
The money was part of an inheritance when my last grandparent died 9 years ago. She doesn't earn any interest on it. She's a pensioner, currently living in Spain (but a British national) and uses the account for expenses when visiting family over here. As she doesn't spend more than a couple of hundred pounds I suggested that we put the money into an account where it will gain interest, which will cover her travelling expenditure with perhaps a bit left over. The same applies for her current account in Spain, no interest. But I'm not here for that.

YBR

The joint account I have with my mum for a similar reason is a joint savings account, but not an ISA. Would this not be an option for you both?

Guapito

YBR said:

The joint account I have with my mum for a similar reason is a joint savings account, but not an ISA. Would this not be an option for you both?

Yes, but we were looking to get a better rate with an ISA

Keep_pedalling

Guapito said:

YBR said:

The joint account I have with my mum for a similar reason is a joint savings account, but not an ISA. Would this not be an option for you both?

Yes, but we were looking to get a better rate with an ISA

You don’t get a better rate with an ISA. You don’t pay tax on anything in an ISA but the rates are lower, so the only people who might benefit from this are higher rate tax payers. 

Putting the money in your name simply should not be done. What happens if you die before her, get divorced or go bankrupt? 

Guapito

Keep_pedalling said:

Guapito said:

YBR said:

The joint account I have with my mum for a similar reason is a joint savings account, but not an ISA. Would this not be an option for you both?

Yes, but we were looking to get a better rate with an ISA

You don’t get a better rate with an ISA. You don’t pay tax on anything in an ISA but the rates are lower, so the only people who might benefit from this are higher rate tax payers. 

Putting the money in your name simply should not be done. What happens if you die before her, get divorced or go bankrupt? 

For example, TSB offer 6% on a monthly saver. That's no good as she's not depositing monthly. Their fixed rate bond account offers 4.6%, their Cash ISA 4.5% for 18 months. Their instant access account offers 3.75%.
In regards to what if..well it depends on how much I trust my wife. She has an excellent relationship with my mother and I trust her implicitly. Bankrupt? It's unlikely. 

I'm not adverse to opening an joint account, I just think that a Cash ISA would produce more fruit. I may be wrong but that's why I'm here. Is there a better option? Fixed Bonds?

jimjames

Guapito said:

Keep_pedalling said:

Guapito said:

YBR said:

The joint account I have with my mum for a similar reason is a joint savings account, but not an ISA. Would this not be an option for you both?

Yes, but we were looking to get a better rate with an ISA

You don’t get a better rate with an ISA. You don’t pay tax on anything in an ISA but the rates are lower, so the only people who might benefit from this are higher rate tax payers. 

Putting the money in your name simply should not be done. What happens if you die before her, get divorced or go bankrupt? 

I'm not adverse to opening an joint account, I just think that a Cash ISA would produce more fruit. I may be wrong but that's why I'm here. Is there a better option? Fixed Bonds?

Good place to start is here. You'll see the best savings account pays 5.1% 
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/