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HMRC internal manual

Trusts, Settlements and Estates Manual

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).

The 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.

The 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. The 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.