Gifting though shared bank accounts

sheramber

https://forums.moneysavingexpert.com/discussion/comment/82136988#Comment_82136988

Why would they not fly to an airport near home rather than you having to drive to through the Eurotunnel to meet them?

If the ticket costs £500 why transfer £3000?

ElectricBeagle

Hi Sheramber

my Mother can’t do a 16 car journey. I drop her to the airport. Drive the 16 hours. Collect her at the other end at that airport. I do the reverse on the return. By doing this, we have our own car and there’s no need to rent and deal with the issues that involves today.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/82137181#Comment_82137181

So, the travel includes your travel expenses for your holiday with her.

ElectricBeagle

Good morning sheramber and thank you for your reply. You make a good point, but where she chooses to go on holiday, is not my choice or even my choice of holiday. If I go on holiday, it’s alone, hiking in Cumbria or Wales, with no one else and I pay for it myself. But I do understand the relevance of your point. How does one define or differentiate between a nurse, carer, work assistant, PA, being ‘on holiday’ if they still have to do what they normally do in daily life for work or as a carer, just in a different location? I see the relevance of your question but then it distracts away the original question and opens another can of worms. If your PA comes on holiday with you and their flight, accommodation, local transport is paid for, but they are still working in a ‘PA’ role, are they then ‘on holiday’ or working? Whereas, if the PA, chooses their own holiday and pays for all their own expenses out of their own bank account, then reasonably, I would say they are on ‘their’ holiday. Here we are talking about family so there is even less distinction. However, putting say £500, in a family members bank account so they can drive your car to where you want it and the funds are clearly spent on your cars travel expenses, and the rules or law require that the ‘card holder be present’, shouldn’t really be an issue of understanding, if good records are kept and their is a clear and obvious electronic and paper trail.

ElectricBeagle

https://forums.moneysavingexpert.com/discussion/comment/82130107#Comment_82130107

Good morning Keep_pedalling.

Does that mean that funds remaining in the joint account or not transferred out of the joint account to your sole account, would not be seen as a gift and or not subject to the 7 year rule?

If for example, the reason for a joint account is clearly defined in say a ‘Declaration of Trust’ (if you can do that with a joint account) and the beneficiary and legal owners were clearly defined and also who contributed what percentage of funds, would the 2nd named person added on to the account not be liable for some sort of tax, under the seven year rule, on the entire sum in the account if the original account holder, the beneficiary was to die?

sheramber

https://forums.moneysavingexpert.com/discussion/comment/82143493#Comment_82143493

That is for HMRC to establish.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82143516#Comment_82143516

I have seen your DM.

Please see my post on 8 September in this thread which provides the link to HMRC's explanation of the treatment of joint accounts where the co account holder is a mere signatory. I thought that link was pretty clear and unambiguous.

Unless and until you withdraw monies from the joint account purely for your own benefit and use, there has been no gift to you at any time until death when you then acquire sole legal ownership by survivorship.

Withdrawals for your sole benefit during lifetime of your mother may set the 7 year clock running, but only if you withdraw in excess of the annual £3,000 gifts exemption. What a purported Declaration of Trust might say on initiation of a joint account is irrelevant. Whether an actual gift has occured at any time during the exsistence of the joint arrangement will be a question of fact.

Of course, you can unnecessarily complicate matters by personally contributing you own funds to a joint account, but I failed to understand why anyone would do this in the specific circumstance you outlined (ie avoidance of future probate).

Just a side point in your case, if your mother at any time after 8 July 2015 owned and subsequently sold a property worth £175k or more, her estate would benefit from the additional residence nil rate band via downsizing relief, so total nil rate bands available at death could be £500k and not £325k.

ElectricBeagle

https://forums.moneysavingexpert.com/discussion/comment/82143854#Comment_82143854

Thank you poiseidon1… that’s very helpful and I will read the thread again.