Who is assessed on interest on bank accounts?
As a general proposition, for income tax purposes, interest income on a bank account is assessable to the account holders in proportion to their beneficial ownership of the money in the account.
The ATO will assume, unless there is evidence to the contrary, that joint account holders beneficially own the money in equal shares.
However, this is a rebuttable presumption, if there is evidence to show that joint account holders hold money in the account on trust for other persons.
Example – Joint signatory (but no beneficial ownership of account)
Adrian’s elderly aunt has a bank account in her name, and Adrian is a joint signatory to that account. Adrian will only operate the account if his aunt is unable to do so due to ill health, but all the funds in the account are hers, and Adrian is not entitled to personally receive any money from the account.
Adrian does not have any beneficial ownership of the money in the account and is therefore not assessable on the interest income.