Use your child - best child savings account

Rab

this is the official view from http://www.hmrc.gov.uk/families/babsi.htm . .

If gifts from a parent produce more than £100 gross income a year, the whole of the income from the gifts is normally taxed as that parent's income. A child cannot get back any tax on that income. Nor can interest paying accounts be registered to have interest paid without tax taken off.

The £100 rule applies separately to each parent

The £100 rule applies to income arising each year. It does not matter whether the money in the account is comprised of part capital and part added interest. The £100 rule applies as long as income is over £100 in any one year for any one child from one parent.

For example

If a parent gives a child £2,000 which earns £98 interest the interest belongs to the child for tax purposes and the account can be registered for gross interest. But if the £98 is added to the account, leading to £101 interest being earned in year 2, the interest has now exceeded the £100 limit. This means it now belongs to the parent for tax purposes and the account cannot remain registered gross. If the account holder asks they should be told to cancel the registration.

ReportInvestor

The child trust fund discriminates heavily in favour of the under 5s. Parents can pay in £1,200 pa and the interest is tax free.

At 5.5% gross over 18 years this could create up to £1,800 tax free interest at age 17-18.

Snot fair .

FREYALILY

Hi Martin

I have £7000 cash to invest for my little girl who is three. Where do I start. I have no intention of touching the lump-sum so need to know the best place for it?

Thanks

Gaynor

ReportInvestor

deefadog wrote: »

My daughter's 10% regular savings just finished with the Halifax and to my amazment when i rang up they said it can continue for the next year and so on!

I can confirm that this is what the new terms and conditions say .

It's even better when the Halifax systems fail to transfer your money out of the 10% account after one year .

pinkparrott

Just reading above about the £100 tax limit , if i we have a childs account with the halifax, that pays up to £100 interest, can i invest some other money in a childs national savings bond that is tax free, or is it the total from all accounts that add up to the limit?

At the moment we have the Halifax regular savings account that has just finished its first year so as of next week we will have about £1400 in the save 4 it account , but i to think we could get a better interest rate.
I'm going to have a look at the bradford and bingley accounts etc, but now going to do some research in to unit trusts etc.

fleetingmind

Hi I've got a few questions regarding this: -

If I open one for my daughter and I agree to pay £10 a month. I can still pay in other amounts like on Birthdays and Christmas but as long as it does not exceed £100 a month. Is that right?

If my parents also want to save money they can also open a trust account and pay in up to £100 a month. Is that right?

At the end of the year the money is transferred to a Save4it account and the 10% Regular saver is no more or does it start again for another year?

Many thanks for your help.

sophers

imported_admin wrote: »

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Hi all I'm new to this but...it is a Brilliant site, I have a Question for all you boffins lol (im thick me)

My step-children have been left £10,000 each, they are 11 and 8 and they arent allowed the money until they are 21 yrs, I am looking for the best savings account for them as we havent set one up yet.

My husband and brother in law will be made trustees so the mother of the children cannot get her hands on it! (she would try!)

Please help as we need to know such things as - Tax? is it capped? can we add to it? is there any risk? etc.

hope one of you or more can help with your lovely brainy brains!
thanks
sophers x

deefadog

Just reading above about the £100 tax limit , if i we have a childs account with the halifax, that pays up to £100 interest, can i invest some other money in a childs national savings bond that is tax free, or is it the total from all accounts that add up to the limit?

At the moment we have the Halifax regular savings account that has just finished its first year so as of next week we will have about £1400 in the save 4 it account , but i to think we could get a better interest rate.
I'm going to have a look at the bradford and bingley accounts etc, but now going to do some research in to unit trusts etc.

I'm in almost the exact same situation! i would also like to know what can be done now, or is it just a fact of life that we have to pay tax now until they are old enough to get there own ISA's?

kalico

Can anyone recommend a child savings account that gives card access using an ATM machine?

We've just been told by Halifax to use ExpressCash account, but that pays a pathetic 1.5% gross.

Hope someone knows of a better one.
TIA

baby_boomer

Try the Barclays BarclayPlus account for 11-16 year olds.

This offers a Visa Electron card with parental consent. I believe this gives access to cash via ATMs.