Inheritance tax and joint account

NXEC2010

My father gave me a £20000 gift three years ago. The gift came from a joint account that he shares with my mother.

My father is very ill and I don't think he has long to live.

When dealing with his financial affairs can I say that the £20000 gift was part from him and part from my mother ?

My mum has dementia and she can't recall him giving me the £20000

Keep_pedalling

Normally a gift from a joint account would be considered a joint one and if your mother still had the mental capacity to make her financial decisions 3 years ago I don’t see a problem with this. If neither of them had used their annual gift allowances in the year they made this gift then £6,000 of that gift is exempt and if they did not use their annual previous year’s exemptions then £12,000 will be exempt.

Whether you will need to actually do an IHT return for him will very much depend on the size of his estate and who benefits from his estate. Does he have a will in place? If he does is your mother the main beneficiary? If their are other beneficiaries do they inherit more than £325k?

Does anyone have financial power of attorney for your parents?

Reed_Richards

A joint account gives both holders access to the funds but either holder can make payments from the account on their own behalf.

Keep_pedalling

Just checked your old posts, back in 2023 you said your parents were making this gift so this was a joint gift.

Your post from last year adds a further complication in that they also transferred legal ownership of their home to you 30 years ago. This was a gift with reservation of benefit so it still falls with their estate for IHT purposes, so depending on the house value could lead to the double whammy of IHT plus CGT. IHT will only be an issue if the value of the home takes their joint net worth over £650k (neither estate will be able to claim the residential NRB)

I hope your sisters are aware of the situation with the house and are OK the very uneven distribution they will be receiving from the estate.