Are Joint Accounts Part of an Estate in the UK?
When a person dies, their assets and liabilities become part of their estate. This includes any money held in a joint account, which can be complicated to deal with. Due to the different regulations surrounding joint accounts in the UK, it’s important that you learn about what’s involved in joint accounts and are joint accounts part of an estate in the UK.
What is a joint account?
A joint account is an account held in the names of two or more people. All account holders have equal access to the funds in the account and are jointly responsible for any debts or liabilities incurred. This means that any money in the account is jointly owned, regardless of who contributed to it.
Joint accounts and estates
When someone dies, their estate – which constitutes all of their assets and liabilities – is assessed alongside their will to determine what to do with the estate.
If there is a joint bank account held between the deceased and a spouse or civil partner, and both parties contributed to the account, then the funds in that account are viewed as being held by both people. However, when one of the account holders dies, then the account balance usually goes to the survivor (but is determined by the terms and conditions of the bank in which the account is held) and regardless of the terms of any Will (or the rules of intestacy).
This happens even where the joint account was only funded by one partner (unless as mentioned the bank terms and conditions state otherwise). It is not an entirely satisfactory situation but is the current legal position given Whitlock and another v Moree  UKPC 44:
Whitlock and another (Appellants) v Moree (Respondent) (Bahamas)- Judicial Committee of the Privy Council (jcpc.uk)
In the UK, inheritance tax is payable on estates over a certain value. Any money held in a joint account is included in the estate’s value for inheritance tax purposes, regardless of who contributed to it.
This means that if the joint account is held in the name of a deceased person and one other person, then any money in the account is liable for inheritance tax. The executor of the estate is responsible for calculating the inheritance tax due and ensuring that it is paid before the funds are released to the surviving account holder.
Are joint accounts part of an estate in the UK?
Joint accounts can be complicated to deal with when a person dies, as the funds are treated differently depending on the terms and conditions which apply to the account. In the UK, any money in a joint account is included in the deceased person’s estate for inheritance tax purposes, regardless of who contributed to it. The executor of the estate is responsible for calculating the inheritance tax due and ensuring that it is paid before the funds are released to the surviving account holder.
If you require any assistance with joint accounts forming part of your estate or think you’d like to learn more about are joint accounts part of an estate in the UK, then get in touch with our team at Will Claim today. Contact us today by arranging a free claim assessment.