Joint bank accounts are nearly always held as ‘joint tenants’.
So, while ownership of the account usually automatically passes onto to the joint account holder, you need to value it as part of the deceased’s estate.
To value the deceased’s share of a joint bank account, you need to find out the balance in the account and divide it by the number of account holders. However, this might not be the case if the account holders have agreed otherwise.
For example, they might have signed a declaration of trust stating that the account is held by them as ‘tenants in common’, rather than joint tenants. So on the death of one of the account holders, their share as defined in the declaration of trust passes under the terms of their will or intestacy, rather than to the other account holder.
HMRC usually scrutinises joint accounts held by unmarried couples or other combinations (such as a parent and child) more closely. They usually treat account holders as owning a share of the funds which is proportionate to their contributions to the account.
For example, if one account holder provided all the funds, the whole balance of the account will be treated as belonging to them when they die. This means it’s potentially subject to Inheritance Tax. This because the normal exemptions from Inheritance Tax might not apply, and the surviving joint holder(s) could be liable for a certain amount of tax.
Withdrawals from the account will usually be set against that person’s own contributions as far as possible. Withdrawals that exceed a person’s own contributions might be treated as a lifetime gift from the other account holder. This might be subject to Inheritance Tax.
Inheritance Tax due on death, which is attributable to the funds in a joint account, must be paid by the surviving account holder who has inherited funds by survivorship rather than necessarily from the deceased’s estate. This is unless there’s different wording in any will made by the person who died.
From an Income Tax perspective, for joint accounts passing automatically to the new owner by survivorship, income arising after death belongs to the surviving account holder.
For accounts held as tenants in common, income attributable to the deceased’s share will pass to their estate and be subject to tax in it. The usual rules on taxation of estate income on beneficiaries on any distribution of capital to them would then apply.