How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5145
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Type Your Tax Question Here... is online now

Good Morning My parents have an HSBC account in Jersey. My

This answer was rated:

Good Morning
My parents have an HSBC account in Jersey. My father recently passed away leaving my other as the beneficiary. We have informed HSBC of the passing and they are in the process of removing my fathers name from the account. We believe that if the account is left in my mothers name only it will be liable to a higher rate of tax or inheritance tax in the event of her passing.
We have been advised to add myself or one of my siblings as a joint account holder to avoid these taxes etc. Is this correct?
If so, I am UK domiciled and tax paying, if it was I who were to be added would there be any tax implication to me personally on an annual basis.
I don't particularly want to be paying tax on my parents savings.
If there was a tax implication to myself , would it then be best to have my brother (Australia) or my sister (South Africa) as the joint account holder.
Apologies for the list of questions, if I've been unclear on anything please let me know and I'll answer as best I can
Regards, ***** *****
Thank you for your question...Please advise if your parents are UK Nationals Many thanks
Customer: replied 2 years ago.
They were both born in the UK are UK passport holders and receive a UK pension, however they are domiciled in South Africa and naturalised as South African Citizens
Thank you for your reply.I would like you to refer to sections 5 and 7 of notes on Inheritance tax from HMRC website here If your parents are domiciled in South Africa (as per your response) but had a permanent home in the UK at any time in the three year before your father passed away (HMRC can treat deemed domicile to be the UK), then his estate would be liable to Inheritance tax on all his assets subject to IHT theshold.Having said that an estate is exempt from inheritance tax if your father left everything to your mother. leaving assets to husband/wife or civil partner. Joint holders -The advantage of having assets in joint names would mean that only her share would be treated as part of her estate in the event of her death. In order to become a joint account holder, a share of your father's share would have to be passed on to one of you in his will .. or through a deed of variation.More information on this can be found here your dad's estate is exempt from UK inheritance tax, then you would need to consider any tax implication in South Africa before making any changes to the bank accounts. Tax implications for youMonies inherited (legacies) are free of tax in the UK. You would have to consider the tax implications of investment returns on his amount .. ie income tax on interest/dividends and capital gains tax if the money was invested and realised a gain on sale of investment. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 2 years ago.
Apologies for the time taken to reply, couldn't get my login to work with the website.
Thank you for your reply very helpful, just a couple more questions.
No Uk residence so no UK tax
South African tax has been dealt with
My father left everything to my mother so no inheritance tax.
Now that the account is in her sole name, she wishes to add one of us, her children, to the account.
If I have read correctly, If it were me a Uk tax payer then I would be liable to tax on interest, dividends and CGT on sale of investments. Would this then be calculated as tax on 50% of the accounts income as the other 50% would be my mothers.
Thank you for your reply.
If you were to become a joint account holder/investor with you mother, you would be liable to tax on interest, dividends and CGT on sale of investments on your share of the total..if the split was 50:50 then you are liable to tax on 50% interest/dividends and CGT if any.
I hope this is helpful and answers your question.
If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer. and other Tax Specialists are ready to help you
I thank you for accepting my answer.
Best wishes