Taxman sinks teeth into Joint!

Revenue and Customs have recently announced an increased focus on lifetime
gifts and assets that are held jointly by the deceased and surviving members of the
family. It gives the example of gifts that can arise on a transfer into joint names or
where a joint owner receives the benefit of withdrawals from accounts funded
wholly by the deceased.
We are regularly dealing with situations such as these. Dave Richards Managing Director
of Legacy said, “The most common example is an estate where there are joint accounts
held between a parent and one or more of their children. These accounts are often set up
this way as a convenience so that the children can assist their parent with payment
of bills and other services.

On the death of the parent, the family sometimes consider that this asset is joint
and should either be completely excluded from the estate or at a minimum only 50%
declared for Inheritance Tax purposes. This would only be correct if the original funds
had been contributed by the surviving party to the joint account – in all other cases
the total asset is either included in the estate or a proportion is considered to be a
gift from the deceased to the survivor”.

Solution. If you’re considering your Inheritance Tax situation it may be possible to
structure this scenario so that a proportion of your joint asset is a potentially
exempt transfer, but in these cases the documentation and disclosure on
income tax returns is critical.

If you have a questions about probate or intestacy click here or call our probate
helpline on 01244 530 339 and we can explore how we can help you.

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