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    • IronDuke
    • By IronDuke 5th Feb 18, 3:33 PM
    • 14Posts
    • 3Thanks
    Child Savings Accounts
    • #1
    • 5th Feb 18, 3:33 PM
    Child Savings Accounts 5th Feb 18 at 3:33 PM

    I want to open two child savings accounts for my grandchildren and if I understand it correctly because I am not the parent of the children there would be no tax payable unless interest exceeded child's tax free allowance.

    Also on my death presumably one or both parents would then take over the account and the tax situation change?

    Can anyone confirm or otherwise enlighten me please?

    Many thanks.
Page 1
    • ValiantSon
    • By ValiantSon 5th Feb 18, 5:45 PM
    • 1,194 Posts
    • 966 Thanks
    • #2
    • 5th Feb 18, 5:45 PM
    • #2
    • 5th Feb 18, 5:45 PM
    Money given by a parent is subject to tax if the interest earned on it exceeds £100 in any given tax year. The same restriction does not apply to money given by a grandparent, so what you propose is fine from a tax perspective.

    There would be no change on your death as the money is the children's. The only change would occur if their parents were to fund the accounts and the interest earned on their gifts resulted in over £100 interest being paid on their deposits.

    Children have a personal allowance, just the same as adults do, so they could potentially have to pay tax if their income (all income not just from this savings account) exceeds the personal allowance (currently £11,500). I imagine that this is unlikely
    • xylophone
    • By xylophone 5th Feb 18, 7:13 PM
    • 24,796 Posts
    • 14,557 Thanks
    • #3
    • 5th Feb 18, 7:13 PM
    • #3
    • 5th Feb 18, 7:13 PM
    If the parents are not fully funding the children's CTF/JISA accounts, you might like to contribute to them.
    • TARDIS
    • By TARDIS 5th Feb 18, 8:21 PM
    • 99 Posts
    • 69 Thanks
    • #4
    • 5th Feb 18, 8:21 PM
    • #4
    • 5th Feb 18, 8:21 PM
    Some banks allow grandparents to open childrens accounts but you'll probably need some form of id for them, eg birth certificate.

    Also, your gifts may be subject to inheritance tax if not out of spare income (in which case it's best to keep spreadsheets to prove this) and over £3k total pa. if you die within 7 years.
    • Sambella
    • By Sambella 5th Feb 18, 8:52 PM
    • 369 Posts
    • 372 Thanks
    • #5
    • 5th Feb 18, 8:52 PM
    • #5
    • 5th Feb 18, 8:52 PM
    I opened an account for my youngest Grandchild last Monday. Some accounts can now only be opened by a guardian or someone with parental responsibility. Junior ISA!!!8217;s especially.

    I now have savings accounts for both my grandchildren with Nationwide. The accounts are in both mine and the grandchildren!!!8217;s names and if anything happens to me it is theirs.
    • Kim_13
    • By Kim_13 5th Feb 18, 10:03 PM
    • 1,902 Posts
    • 2,032 Thanks
    • #6
    • 5th Feb 18, 10:03 PM
    • #6
    • 5th Feb 18, 10:03 PM
    You may find the MSE guide to children's savings accounts of interest:
    Sealed Pot 11 #520 ~ /£100
    VSP 2018 #9 ~ £19.55/£180.00
    CCCC 2018 #1 ~ £20.75/£180.00

    I'm a Board Guide on the Savings and Investments , Budgeting and Bank Accounts , Credit Cards and Marriage, Relationships and Families boards which means I volunteer to help get your forum questions answered and keep the forum running smoothly. Please remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to (it's not part of my role to deal with this.) Any views are mine and not the official line of
    • IronDuke
    • By IronDuke 5th Feb 18, 10:12 PM
    • 14 Posts
    • 3 Thanks
    • #7
    • 5th Feb 18, 10:12 PM
    • #7
    • 5th Feb 18, 10:12 PM
    Thanks to everyone for your responses helpful advice indeed.
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