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HMRC internal manual

Trusts, Settlements and Estates Manual

HM Revenue & Customs
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Ownership and income tax: Specific types of property: bank and building society accounts: example 7: joint names - resulting trust

A puts £100,000 of his own money into a bank account. The account is held jointly in the names of A, B (A’s wife) and their adult son C.

The bank operates its usual policy (TSEM9932) and allocates the interest one third each to A, B and C when informing HMRC of the amounts under the usual third party arrangements.

In the course of a compliance check, HMRC finds that A provided all the funds, but he has self assessed on only one third of the income.

ITA/S836 does not apply because the account is not held in the joint names of husband and wife only (TSEM9814).

In this case, there is no evidence that A has transferred beneficial ownership to B or C. It remains with A, and he is taxable on all the interest.