Mother and daughter have a joint bank account. All the money is the mothers, the daughter is a joint holder for admin purposes only as mother is 92. On whose tax return does the interest appear ?
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Mother's. But I would put a white space explanation on the daughter's return saying why none of it is included on hers.
Whilst preferring not to take issue with John, I'm not entirely sure his response is entirely correct.
Surely, while both parties are alive, interest from the joint account would usually be taxed 50/50 unless they make a joint declaration to be taxed according to their beneficial interests?
John is correct. Automatic 50/50 only relates to spouses for election purposes.
It is common practice for accounts to have a purely administrative signatory in circumstances like these and you should be able to show from the forms signed at the bank and the source/activity on the bank which will only relate to the Mothers income and liabilities
@OP
When you say joint account is all the money available at the daughter's disposal to do whatever she wants to do with it?
I thought with bank accounts, that each holder owns an equal share regardless of the source - and that you can't have an uneven split with a bank account, unlike the "tenants in common" situation with a house.
I could be talking nonsense though.
To add to my last post - My reasoning behind this was that you can't split the ownership on a bank account for the same reasons you can't split the ownership on a property owned as joint tenants.
Like I said though, I'm not sure where I'm getting this from and it could be incorrectly lodged in my brain.
Nearly 10 years after ITA 2007, I think we can safely forget what ICTA 1988 might have once said, other than in cases involving fraud.
So let us all read ITA 2007, section 836 together shall we:
This section applies if income arises from property held in the names of individuals who are married to, or are civil partners of, each other, and are living together..."
Now read the Bingham case: http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02528.html
Whilst the legal interest in joint bank accounts are held as joint tenants, the beneficial interest is assumed by default to remain the mother's (unless the daughter has an unfettered right to draw on it), since the capital all emanated from the mother.
If the capital is all the mother's then the interest arising from it is all the mother's.
I might be wasting time on nothing here, as the account could only have a tenner in it, but...
What happens when the nursing home comes knocking for fees?
People tend to make these arrangements as to avoid timing issues when inheriting cash, and also to avoid care home fees.