IHTM15060 | Investigation of form IHT404: lifetime transfers

There are broadly two situations when a lifetime transfer may arise in respect of jointly owned property. These are:

• At the start of the joint ownership of property other than money, if the deceased either

  • transferred their own property into joint ownership, or

  • made a contribution towards the purchase or acquisition of the joint property that was greater than their share or interest in that property

• On any gift of a part of an interest that the deceased had in some asset. For example, a house was beneficially owned by the deceased and his wife and was then transferred to the beneficial ownership (IHTM04031) of the deceased, his wife and their son. That transfer reduced the deceased’s interest in the house from one-half to one-third so there was a lifetime transfer of a one-sixth share by the deceased to the son.

In relation to joint accounts in both Scotland (IHTM15051) and the rest of the UK (IHTM15042), you should look out particularly for

• any claim that the deceased made a lifetime transfer when they opened a joint account, and

• any withdrawals made (during the deceased’s lifetime) by the other joint owners from an account which had been funded solely or largely by the deceased

A transfer of money into a joint account does not automatically involve any immediate gift of a beneficial interest (IHTM15011) by the provider of the money to the other account holder(s). But, any withdrawals made from the joint account by any of the account holders over and above their contribution may be lifetime transfers. For example, if the deceased had transferred £20,000 into a bank account in the joint names of himself and his son, the transfer into the account did not necessarily constitute a lifetime gift of £10,000 by the deceased to the son. However, if the son had subsequently withdrawn £15,000 from the account, this could have been a transfer of value made by the deceased at the time of the withdrawal.