Use your child - best child savings account

mutley74

how does one prove that a gift is from grandparents? My son got some money which we deposited..but how can i prove its from them and not me. Gift was £500 to save as given as cash.

martinman3

atpug wrote: »

how does one prove that a gift is from grandparents? My son got some money which we deposited..but how can i prove its from them and not me. Gift was £500 to save as given as cash.

I am assuming that you could get the grandparents to sign a piece of paper stating that the cash was a gift from them.

It is much less trouble though for the grandparents to open an account in trust for your son and put their money in there.

martinman3

nsharples wrote: »

Before he died last year, my father had invested £16,000 for my 7 year old son in two Nationwide Smart accounts and one Bradford and Bingley Kidzone account. I would now like to consolidate the three accounts into one and put his savings in the highest possible interest bearing account.

The three accounts pay full gross interest and I have now become the named account holder (on behalf of my son) following grant of probate.

What account would you recommend, given that I wish to retain the no tax status, am happy to commit the savings for the long term, and would ideally prefer to mange the account online? Many thanks.

I would recommend that the proceeds from these three accounts is placed in an account which you do not make contributions to in future, this is because of the HMRC £100 rule. Currently, you can claim that the proceeds are contributions solely from your father and the interest on them cannot be considered by the £100 rule. If you add funds to the account you will then need to work out what portion of the interest generated is applicable to the rule.

Another point to consider is were you already a member of the Nationwide and if so was the charitable assignment clause in effect ?
You should find out what your (and your son's) membership status is now at the Nationwide and if it is the only account you have there and the charitable assignment clause does not apply to you (your son) then you should leave £100 in one of the Smart accounts.

As far as accounts goes, at the time of writing the YBS Treasure Bond 6.3% AER fixed for 1 yr would be an excellent choice but there are similar accounts you could choose.

Trying_to_be_good

I can't see any mention in Martin's article - what if a step-parent is giving the child the money? Is there still a £100 interest limit?

thanks for any help

nilocmac

Trying_to_be_good wrote: »

I can't see any mention in Martin's article - what if a step-parent is giving the child the money? Is there still a £100 interest limit?

thanks for any help

No one seems to have answered this question was wondering does anyone know as I am about to be in this position. (i.e. I am getting remarried and perhaps my child could benefit).

jvr1878

Found the answer here:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/DG_10014128

and yes the £100 limit appears to apply to step-parents as well

cartertucker

Hi, I opened my son a child trust fund account with 'The Childrens Mutual' I pay in £10 per month & used the initial voucher he got from the goverment.

The most recent statement I recieved stated that on april 07 his account was worth £461.79 & on April 08 it was worth £546.04 so taking into account that I have paid in £120 , his account has made a loss!

Have a made a bad mistake here? Shall I move his money?

They say they buy into shares & that this can go up & down, but im not sure I want to take that chance now.

I hope you can help.
Many Thanks,
Kelly.

JustJewels

Hi all,

Call me thick but I can't figure out this
"If a child generates more than £100 interest in the course of the year from money specifically given by each parent, this income is taxed at that parents' tax rate."

If I am a zero rate tax payer and my husband is a high rate taxpayer, does that mean we can each open an account in our childs name? Or is that £100 an aggregate total from both parents?

Thanks in advance!

JJ

Froggitt

£100 each parent. But as youre not a taxpayer, make sure it comes from you if its likely to go over the £100 pa

It doesnt have to be a separate account, but if its the one account, you should keep records in case the taxman comes a knocking.

Pennywise

A relative's will leaves £10,000 to my son (aged 6) which is to be made available to him on his 18th birthday.

The executors of the will are keen to pay the money into a bank/b'soc account that prohibits withdrawals before the child's 18th birthday, as the will is otherwise very simple and the executors want to settle it and move on as soon as possible and don't really want any ongoing obligations, such as they would have if they were the trustees of an account on behalf of my son.

The only account I can find is the Harpenden Building Society 18 club account. Are there any other good accounts that are similar, in that they prohibit any withdrawals before 18 years old?