Joint Bank Accounts and Clearance Procedures
04 August 2022
We have dedicated a number of blogs on this site to the question of dealing with the new Revenue procedures for income tax clearance in death cases. So, we have looked at, for example, questions of how far you go back, what are the practical steps and what is the role of a solicitor versus an accountant.
We have recently looked at joint assets and how that impacts and also the situation of those that are married or civil partners. In the back of your mind there have been a niggling question however – “Wasn’t there always a clearance procedure in place as well for joint bank accounts?”. The answer to this is “Yes”. In addition to the new Revenue procedures, you must also be alive to the clearance procedure where there are joint bank accounts.
Clearance for bank accounts arises where monies are held on a deposit account (not current) in joint names and over the sum of €50,000. It doesn’t apply to husband and wife situations. You apply for clearance by means of Form CA4 and on receipt of same Revenue issues the clearance form IT8. You will not be able to close a joint account that is not in the name of a husband and wife without the IT8.
The filing out of the Form CA4 is not the trigger for the payment of tax. If inheritance tax is payable on foot of a joint account, that is paid in the normal course through the IT38 procedure. So the IT8 and IT38 are separate procedures and not to be confused. However a couple of points. In some cases prior to closing the account the practice of the financial institution is to issue funds to allow payment of the tax to Revenue to facilitate the issue of the IT8. Further payment of the relevant tax can be a step to assist in issue of the IT8.
Once Revenue issues an IT8 then you will be in a position to close the deposit account with the relevant financial institution. It is not possible to do so until this has been obtained.
Revenue do not deal with this topic in their new procedures on income tax clearance and this procedure sits outside of that. Going through the CA4/IT8 procedure doesn’t relieve you from having to deal with the income tax clearance procedures in estates in the normal course.
I attach here the form CA4.
Hope this helps and if you have any queries on probate, will drafting, tax or capacity please email me on email@example.com