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Where Taxpayers and Advisers Meet

Joint Account IHT Form Completion iht404

caffe
Posts:25
Joined:Wed Aug 06, 2008 4:02 pm
Joint Account IHT Form Completion iht404

Postby caffe » Sun Dec 08, 2019 6:47 pm

A father had put his daughters name on a joint on savings account in 2010, interest income payments from this account were directly paid into the fathers current account and tax paid by father only on income. Upon death would 100% of the savings be included in estate or 50%?
Bank account changed in 2015, IHT404 form asks for % contribution by account holder, is this the original investment in 2010 or 2015 that needs to be recorded?

AGoodman
Posts:1341
Joined:Fri May 16, 2014 3:47 pm

Re: Joint Account IHT Form Completion iht404

Postby AGoodman » Mon Dec 09, 2019 11:51 am

Likely 100% on the basis she was only an account holder for practicality but you really need to ask daughter/family why she was an account holder.

If she was a joint beneficial owner then she should have been declaring half the income (unless it would be covered by allowances etc).

Not sure I understand the second question - it means who was the source of the money in the account at death. Sounds as though it all originated from father.

AGoodman
Posts:1341
Joined:Fri May 16, 2014 3:47 pm

Re: Joint Account IHT Form Completion iht404

Postby AGoodman » Mon Dec 09, 2019 11:52 am

And actually, if she was just on the account for practicality rather than as a true beneficial joint owner, I would record it as his account , rather than a joint asset.

pawncob
Posts:4830
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Joint Account IHT Form Completion iht404

Postby pawncob » Mon Dec 09, 2019 12:47 pm

If the account (half) was gifted to the daughter in 2010 then a ppn would be exempt depending upon date of death.
With a pinch of salt take what I say, but don't exceed your RDA

caffe
Posts:25
Joined:Wed Aug 06, 2008 4:02 pm

Re: Joint Account IHT Form Completion iht404

Postby caffe » Mon Dec 09, 2019 1:25 pm

Daughter was gifted the money but father has always received, declared and paid tax on all of interest (income) since 2010, assume this will be viewed by HMRC as father having sole benefit from asset and therefore 100% owned?

AGoodman
Posts:1341
Joined:Fri May 16, 2014 3:47 pm

Re: Joint Account IHT Form Completion iht404

Postby AGoodman » Mon Dec 09, 2019 3:45 pm

Yes, him receiving all the income is a textbook reservation of benefit.

If you treat the account as beneficially 100% his then you don't need to consider the reservation point (or forms!).

maths
Posts:8333
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint Account IHT Form Completion iht404

Postby maths » Mon Dec 09, 2019 5:54 pm

What was father trying g to achieve?

Nothing is achieved by adding daughter's name and then father declaring all income etc on his Tax Return.

AGoodman
Posts:1341
Joined:Fri May 16, 2014 3:47 pm

Re: Joint Account IHT Form Completion iht404

Postby AGoodman » Mon Dec 09, 2019 5:59 pm

It's not unheard of. It could be an (unwise) solution to incapacity and could (legitimately) avoid the need for probate if there were no other assets that needed it.

caffe
Posts:25
Joined:Wed Aug 06, 2008 4:02 pm

Re: Joint Account IHT Form Completion iht404

Postby caffe » Mon Dec 09, 2019 7:25 pm

Father's intention was to protect all assets from second wife (previous deceased) in case of divorce and wants daughter to inherit upon death. agreed it's a bit of a pigs ear!!

maths
Posts:8333
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint Account IHT Form Completion iht404

Postby maths » Mon Dec 09, 2019 9:50 pm

Yes !

As father declared everything on his return then more straight forward for his estate to include the monies as to 100%.

Don't want to get involved with HMRC enquiries as to why daughter didn't declare. anything on her return.


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