The implications of sharing a bank account
Sharing a current account with other people, whether they are family members, flatmates or partners, has implications both for the organisation of our finances and for our taxation. Mireia Cano, 11Onze’s head of agents, explains the different formulas for being listed on a bank account and the tax responsibilities they entail.
A first element to consider when we want to share a current account is the role of each person since they can be listed as an account holder, authorised person or legal representative.
Account holders are equally responsible for the money unless an official document proves otherwise. Moreover, the account holders “can have an indistinct signature, i.e. anyone can make transactions, or a joint signature, i.e. all of them must sign in order to make transactions”, as Mireia Cano explains.
Another option is for someone to be listed on an account as authorised or a recognised signature. In this case, the account holder is the one who has power over the money and who will be liable for tax purposes, although authorises another person to carry out certain actions, such as making transfers or withdrawing money. An authorised person may never create or cancel a bank account or linked card contracts.
A third role is that of a legal representative, which is used, for example, for the accounts of minors and dependants. Legal representatives have power over the money in the account even though they are not account holders.
When we share a bank account, it is essential to bear in mind how each of our actions and those of the other people involved can affect us. Therefore, it is highly recommended that, before opening the account, we define what we will use it for and be clear about what it will imply for each person and what responsibilities we are assuming in legal and tax terms.
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