How can I avoid spending Mum’s cash on tax or care?

Lisa Vaughan
28 November 2018


My mother lives alone. She owns her own home outright and has more than £100,000 in investments and savings. If we were to put the savings accounts into our joint names and anything were to happen to my mother, would the account become mine? Would we avoid inheritance tax because of this?

Also, should she transfer her home to me or my sister? If we did this and she were to become ill, does this mean the property wouldn’t be used to pay for her care?



If your mother died after changing an account into joint names, the balance of this account would pass to you as the surviving account holder. In this situation, there is often no need to wait for probate, so once a death certificate is presented to the bank they are likely to move the money into your sole name immediately.

However, this may not take into account the wishes outlined in your mother’s will. For example, if your mother wanted all of her assets to be split 50/50 between two children, the joint account matter may cause an imbalance in favour of you as you would hold the proceeds of this account in your own name.

Regarding inheritance tax (IHT), HMRC usually regards each account holder as beneficially entitled to the proportion of the account attributable to their contributions. So if your mother provided all the money in the account and continued to have the right to withdraw all the money, the whole amount would form part of her estate. However, IHT is only likely to be due if her estate is worth more than the nil-rate band of £325,000.

If someone has assets between £14,250 and £23,250 in capital and savings and is eligible for care, the local authority will contribute towards care costs. If someone has assets above £23,250, they will have to fund their own care costs.

When assessing a care funding claim, local authorities usually ask about current and previously owned assets. They are likely to view homeownership change as a ‘deliberate deprivation of assets’ and an attempt to conceal wealth. They could treat the value of the house as if the change had not been made and include its value in any future test for care funding assistance.