Joint bank accounts and survivorship after death: who gets the money, and is it taxed?

Who gets the money in a joint account when one holder dies?

The surviving account holder does, automatically. Joint bank accounts in England and Wales almost always operate on the principle of survivorship: when one holder dies, the whole balance passes to the survivor by operation of law, outside the will and outside probate. The bank typically needs nothing more than the death certificate to take the deceased's name off the account, and the survivor can carry on using the money without waiting for a grant. What survivorship does not do is make the money invisible to inheritance tax. For a two-person account, half the balance normally still counts as part of the deceased's estate. This guide covers both halves of that picture; it is general information rather than legal or financial advice, so treat it as a starting point, not a substitute for tailored help.

How survivorship works in practice

Joint accounts are held in a way that works like a beneficial joint tenancy. GOV.UK's guidance on valuing an estate describes the effect: joint tenants automatically pass their share of an asset to the other owners on death. Applied to a bank account, that means:

• The money never enters the probate process. The account is not frozen the way a sole-name account is, and the bank will not ask for a grant of probate before releasing it.
• The will does not control it. Even if the deceased's will leaves "all my savings" to someone else, the joint account has already passed to the surviving holder by survivorship.
• The paperwork is light. The survivor usually presents the death certificate, the bank removes the deceased's name, and the account continues in the survivor's sole name with direct debits intact.

This is one of the main reasons couples often need no grant at all on the first death: the home passes by survivorship if held as joint tenants, the accounts pass the same way, and pensions and life policies often pay out under their own nomination rules. Our fuller guide to whether you need probate when a spouse dies walks through that whole picture, and the do I need probate checker gives you a quick answer for your own situation. Where a grant is needed for other assets, the court's application fee is £526 for estates over £5,000 (nothing at £5,000 or below), per the official fees page.

The tax point people miss: half the account still counts

Bypassing probate is not the same as bypassing inheritance tax. When the estate is valued for IHT, GOV.UK's instruction for joint bank accounts is to divide the balance by the number of account holders. Two holders, half each: if a couple held £60,000 jointly, £30,000 goes into the deceased's estate figure even though the survivor received the full £60,000 automatically.

Whether that half share produces any tax depends on the wider estate:

• Married couples and civil partners: the half share passes to the survivor and is covered by the spouse exemption, so no inheritance tax arises on it. It still has to be counted and reported.
• Unmarried partners, siblings, friends, business partners: there is no automatic exemption. The half share simply forms part of the estate tested against the £325,000 nil-rate band, alongside everything else. Two sisters holding £200,000 jointly, for instance, would see £100,000 counted in the first sister's estate on her death, with tax at 40% possible if the estate overall exceeds the available allowances.

Where a full inheritance tax account is required, the deceased's share of jointly owned assets, including bank accounts, is reported on schedule IHT404 alongside the main IHT400. So the executor still has to find out about the account, value it at the date of death and disclose the share, even though the money itself went straight to the survivor. For where the estate's headline numbers land, our guide to the UK inheritance tax threshold covers the allowances in detail.

Convenience accounts: when the 50/50 split does not apply

The equal-shares assumption has an important exception. GOV.UK says that if an account is in joint names for convenience only, you include the amount the deceased actually owned rather than a mechanical split. HMRC's Inheritance Tax Manual at IHTM15042 sets out the underlying approach: each holder is treated as beneficially entitled to the proportion of the account attributable to their own contributions, and withdrawals are set against each person's own contributions as far as possible.

Take Margaret, 88, who added her son Daniel to her current account so he could pay her bills and manage her shopping. Every pound in the account came from Margaret's pension and savings. On her death, Daniel receives the balance by survivorship, but for inheritance tax the whole account counts in Margaret's estate, not half, because she contributed everything. The reverse also protects families: HMRC should not tax a larger share than a holder actually provided just because both names were on the account. Records matter here, so executors should keep statements and anything showing where the money came from. This is a common area of confusion for the executors handling the paperwork; our executor duties checklist includes chasing down exactly this kind of detail.

Getting the account and the estate sorted

For the surviving holder, the practical steps are short: notify the bank, provide the death certificate, and let the account continue in your sole name. For the estate, the deceased's share still needs valuing and, where an IHT400 is required, reporting on IHT404. Start with the do I need probate checker to see whether the rest of the estate needs a grant at all, and see our probate pillar guide for the full process. If you have been widowed and are working out what actually needs doing, our hub for surviving spouses gathers the essentials in one place. And if the joint account sits inside a larger or more tangled estate, particularly where contributions were unequal or the holders were not married, a probate specialist can confirm how the share should be counted before anything is filed with HMRC, which is far easier than correcting a return afterwards.