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Where Taxpayers and Advisers Meet

Joint accounts with elderly parents

joeian
Posts:6
Joined:Wed Jun 30, 2010 6:09 pm
Joint accounts with elderly parents

Postby joeian » Mon Apr 26, 2021 7:11 am

Good morning,
I wonder if anybody can help.

My sister and I have joint bank accounts with our father who is 90. He was insistent on this for whatever reason.
He and my mother are still married.
We did a nil rate discretionary trust in 2006 before the changes to transferring nil rate.

The question is will the joint accounts for iht purposes effect the nil rate allowance or will it be classed as part of the estate on his death.
The funds are my fathers and none have been withdrawn.

Thanks for your help
Joe

maths
Posts:8256
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint accounts with elderly parents

Postby maths » Mon Apr 26, 2021 3:20 pm

Adding children's names to a parent's bank account is common although for tax purposes can be tricky.

If all the money added to the account was from the parent and al withdrawals are for the benefit of the parent it's usually the case that all the monies belong to that parent. Interest on the account is the parent's and put on their tax return and on death the whole of the account is the parent's and thus forms part of their estate for IHT.

Normally a nil date band discretionary trust is contained in a will. Is that the case here or was it set up in lifetime?

joeian
Posts:6
Joined:Wed Jun 30, 2010 6:09 pm

Re: Joint accounts with elderly parents

Postby joeian » Mon Apr 26, 2021 8:12 pm

Thanks for the reply.
Yes, the discretionary trust nil rate legacy is contained in the will.
Both joint accounts was fully funded by my father but no money has gone in or out for several years.

I have been using a very good IHT calculator on invidion uk.
What I’m not confident about is would the joint account funds be as (Leave £(x) of assets to non-spouse (i.e. children or grandchildren) upon first death).
Or would it be cash forming the overall part of the IHT.


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