What happens to a joint bank account when one person dies?
The money usually passes to the survivor automatically, but that is a rule about ownership, not about tax — and a joint account with a non-spouse can behave quite differently.
- Difficulty
- beginner
- Time
- 12 min
- Read
- 3 min
Short answer
A joint account normally passes to the surviving holder by survivorship, outside the will and outside probate. The bank converts it to a sole account on production of a death certificate. That does not necessarily take it outside inheritance tax, and where the account was joint with an adult child for convenience rather than genuine shared ownership, the position can be more complicated.
Two different questions get tangled here. Who owns the money is a matter of the account's legal form — almost always a joint tenancy that passes to the survivor. Whether any of it counts as part of the deceased's estate for tax is a separate question about who actually contributed and who was entitled to it. For a married couple with a shared account both answers are simple. For an account opened so a son or daughter could help with the shopping, they are not.
Step by step
- Notify the bank with a death certificate.Most banks have a bereavement team and a single notification process. Several institutions can be notified at once through the Death Notification Service. The account is normally converted to a sole account in the survivor's name.
- Expect the account to keep working.Unlike a sole account, a joint account is not usually frozen. Direct debits continue, which is a relief and also a risk — check what is still going out for services the deceased used.
- Understand survivorship.The balance passes to the surviving holder by operation of law, not under the will. A will cannot leave a jointly held account balance to someone else, and it is outside probate.
- Treat the tax question separately.For inheritance tax, HMRC looks at who provided the funds and who was entitled to them, not just whose name is on the account. Between spouses and civil partners this rarely matters because transfers between them are generally exempt. Between a parent and an adult child it can matter a great deal.
- Distinguish a convenience account from genuine joint ownership.Where an account was made joint so someone could help manage money, the intention may have been to give access rather than ownership. That can mean the whole balance forms part of the estate despite the survivorship rule. It is worth taking advice where the sums are significant.
- Deal with joint savings, ISAs and investments separately.ISAs cannot be held jointly at all. A surviving spouse or civil partner has an additional permitted subscription allowance equal to the deceased's ISA value, which is separate from inheriting the money and is widely unclaimed.
- Review the surviving arrangements.A sole account with only one signatory is exposed if that person loses capacity. This is the moment to check that a lasting power of attorney exists, and to review standing orders, direct debits and the beneficiary nominations on any pensions and policies.
Questions people ask
Is a joint account frozen when someone dies?
Normally not. It usually passes to the surviving holder and is converted to a sole account. Sole accounts, by contrast, are frozen on notification.
Does a joint account form part of the estate?
For ownership, generally not — it passes by survivorship. For inheritance tax, HMRC looks at who contributed and who was beneficially entitled, so part of it can still be counted, particularly where the joint holder was not a spouse.
What happens to a joint ISA?
There is no such thing. ISAs are individual. A surviving spouse or civil partner can claim an additional permitted subscription equal to the value of the deceased's ISA, which preserves the tax wrapper.