I am dealing with an estate where the Wife (deceased) and husband held a joint account but the monies held in the account belonged solely to the husband. Would I have to include the monies (or half of it) in the IHT account submission or not.
Hello,
It will depend upon what the husband intended by the monies. If the money is held in a joint account with the husband, the funds will pass to the husband. Provided there are no issues on domicile, the passing of the asset to the husband would be tax neutral. It will also depend on what the husband intended by stating the wife’s name - did he intend for her to have a beneficial entitlement? If so, how much? Was any income from the account declared on the wife’s annual tax returns? If there is any beneficial entitlement (be it 1p) received by the wife, this needs to be declared to HMRC. The value declared depends on the evidence and the husband’s intentions. Have you also checked that there was no document severing ownership to tenants in common registered with the bank or HMRC, which is done for income tax planning on occasions. I hope that this is of assistance.
Carly
The monies were received by the husband as his share of the estate of his mother who had passed away. His intention was to gift it to his children. The money was received into the account only a short while before the wife passed away.
The question of who owns the balance of a joint account on the death of one joint holder as a matter of trust law (rather than tax law) is fact specific, with the intentions of the party funding the account being minutely examined in order to see if any relevant presumption (resulting trust or advancement) has been rebutted, see e.g. Drakeford v Cotton [2012] EWHC 1414(Ch). On your facts it seems there was no intention to make any gift to the wife and the relevant money appears to have been held for the husband absolutely . The tax treatment of joint accounts can also be complex and does not necessarily follow the trust analysis of the beneficial interests in the balance, but I am afraid that’s not my field.
An interesting point on these joint account questions is to what extent presumptions of advancement or resulting trust apply. Is it reasonable to presume that a husband who puts money into a joint account with his wife intends survivorship to apply? And how express does the evidence rebutting that presumption need to be?