TSEM9946 - Ownership and income tax: Specific types of property: bank and building society accounts: example 6: joint names - disabled relative
A savings account is held in the joint names of father A and B (A’s adult son, a non- taxpayer).
»Ê¹ÚÌåÓýapp bank operates its usual policy on joint accounts (TSEM9932) and allocates the interest 50/50 to each named account holder when informing HMRC of the amounts under the usual third party arrangements.
»Ê¹ÚÌåÓýapp father writes to HMRC saying that income tax deducted at source should be repaid to his son B. A explains that all the funds in the account come from his son’s income support. His son is disabled and the father operates the account for his son’s convenience. »Ê¹ÚÌåÓýapp father’s name is on the account for administrative reasons only, and he does not benefit from it in any way.
A and B are the legal owners, but B is the beneficial owner of the interest, and is taxable on it. Repayment can be made of tax on all the interest.