Use your child - best child savings account

realaledrinker

I have asked this question in several threads in the past & never got an answer:

Has anyone actually fallen foul of the £100 rule - that is, has the taxman actually caught anyone out and, if so, how??

baby_boomer

It's an interesting question.

If Posh & Becks give £100K to each of their nieces & nephews the Revenue is happy to waive tax if the income is £5,000.

And if Posh & Becks give £1200 pa to any of their own children under 4 then that's tax free even though the CTF rules allow them to give over £20K tax free.

But if single working mum Ms Smith gives £2,000 to her only daughter, aged 6, to help save up for the £50,000 she will need to get through university then she's theoretically on the Revenue's hit list.

Unfair or what?

realaledrinker wrote: »

Has anyone actually fallen foul of the £100 rule - that is, has the taxman actually caught anyone out and, if so, how??

I have known someone who was investigated on these grounds by the Revenue and came out with a clean bill health after many wasted hours. It wasn't pleasant and they'd have preferred to pay the tax than had have the hassle.

Obviously the R85 forms go to the Revenue, so they've got the information if they can be faffed to use it.

I wouldn't advise messing with these guys.

Also, anyone starting a discussion on about how to avoid tax on a website read by millions is probably the surest way to trigger a clampdown.

Darling

I have been looking into childrens saving accounts and found some information on the Inland Revenue site about interest and tax - hope it helps!

http://www.hmrc.gov.uk/taxback/childsavings.htm

Leighthal

I must confess,I've not read the whole thread.But,I'm getting confused over the 100 quid rule.
I have three sons (oldest is 3) all with Halifax Save4it accounts( I am trustee for each).Can I max out each of their accounts to earn just under the 100 quid a year and be free from income tax?(then either withdrawing this for their CTFs or Birthdays & Christmas). Or will the total interest from all 3 accounts be taken as the taxable figure?

craggus

Hi Everyone

My daughter has just turned one, and I am looking to start investing a little bit for her future. At the moment, all we have set up for her is a Childs Trust Fund account into which we paid our voucher following her birth.. I also have £20 a month going into this account.

We would like to set up a saving account into which I can save a regular amount every month (say £30-£50). This can be in my name or her name, but at this moment in time I think I would like to be in control of this fund when she turns 18 (unlike the Child Trust account), so it couldn't be 'wasted'... we would have no plans to touch this money until then. What is my best option for maximising the return in 17 years time?

Also, she had a few hundred quid given to her by relatives for her birthday. Is it worth opening a savings account for her yet, or should I just lump this in with my own savings in the short term, until she is old enough to set up (and understand) her own account?

Any advice greatfully received!

Thanks

Craig

Froggitt

realaledrinker wrote: »

I have asked this question in several threads in the past & never got an answer:

Has anyone actually fallen foul of the £100 rule - that is, has the taxman actually caught anyone out and, if so, how??

I was investigated by the revenue, but found "not guilty". The reason was all the kids accounts got submitted to the revenue under my name (Im named as the account operator or something).

An interesting question.......when the kids receive the £200 windfall from Portman this summer, how will that be treated by the revenue with reference to the £100 rule?

baby_boomer

I don't believe it is wise to even raise this question.

Out of sight, out of mind.

If the original money is from grandparents there's unlikely to be an issue.

But if it was from parents there is the potential for the Revenue to react in a way that would go against natural justice, if not against the Revenue's own tight rules.

Leighthal

Froggitt wrote: »

I was investigated by the revenue, but found "not guilty". The reason was all the kids accounts got submitted to the revenue under my name (Im named as the account operator or something).

Does this answer my question in post 165?

nilocmac

The thing I dont understand is does this mean every year. If not then are you stuck on that amount forever? So you can not save anymore for them.

debbie42

nilocmac wrote: »

The thing I dont understand is does this mean every year. If not then are you stuck on that amount forever? So you can not save anymore for them.

That's my understanding of it: it's not a per annum allowance. I'd love to be told different, if anyone knows better?