Use your child - best child savings account

Logansbun

If I were to put a large portion of my savings into a child's account in order to avoid paying tax at a higher rate is that tax avoidance or tax evasion? Am I breaking any laws by doing that?

Reaper

It wouldn't work. If the money in the child's account was gifted from a parent and earns more than £100 in interest then the whole lot (not just the bit above £100) is taxed as if it was the parent's income. So at higher rate in other words.

The £100 rule exists to stop parents doing this.
http://www.hmrc.gov.uk/tdsi/children.htm

Funness

hi, does anyone know if this is true, my mother went into the Halifax to sort out the scam which they pulled off changing the child's regular saver to a young saver, she managed to change it to the new higher interest child's saver but was told my son is only allowed 1 of these accounts and that I could not open one, we both have been paying £100 a month for a number of years, is this true can a child only have parents and not grandparents, uncles paying into an account, or as usual the Halifax talking rubbish

xylophone

http://www.halifax.co.uk/savings/accounts/branch-accounts/#kidsregularsaver
Kid's Regular Saver
Only 1 account per child
Pay in from £10-£100/month

See above - not quite sure how you can both have been paying £100 a month into the account? Unless there has been a change in t&c?

Anyone may give money to a child - (although individual savings institutions may have their own rules about the operation of particular accounts) - parents are responsible for signing any R85.

Incidentally, see http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/DG_10013916
http://www.hmrc.gov.uk/tdsi/children.htm
concerning parents, tax and interest for fuller explanation than is on the Halifax website.
It has always seemed to me wise to keep any money given by parents separate from that given by others.

markmas

xylophone wrote: »

See above - not quite sure how you can both have been paying £100 a month into the account? Unless there has been a change in t&c?

Yes there has been a change in the terms of the account, they changed during last year. Before that you could have multiple accounts, opened by different relatives for each child. So for example each grand parent could have an account, and each parent too.

That was when the account was called 'Children's Regular Saver', it is now called 'Kid's Regular Saver'.

The accounts maturing now will have been opened before the terms changed.

ylesia

The whole regular saver/ young saver saga has just happened to us. I was quite happy to keep the young savers open as they come with a cash card and I thought it would be good for my kids to start learning about managing money (and easy access but obviously I would keep the cards)

Until I was told that the cash cards are only available from Halifax branches! It's exactly the same account but for some reason BOS aren't giving out the cards - in fact you get nothing, no passbook, nothing tangible at all which I think is important for what looks to be a child instant access account.

Oh well, I closed the accounts, their loss

LauraEd

My daughter is taking a 6 week drama course over the summer holiday and will be away from home for most of the week. I don't want to give her a pocket full of cash to get her through the week for food and travel and am worried that she will not have access to cash in an 'emergency' situation. She will shortly be 16 and I am wondering if anybody knows of a bank account that I can open for her that will keep the cash safe and accessible, whist allowing me to transfer, if necessary.

lucky77

re bank account for a teen
My 15 year old has a Lloyds under 19 account. It pays 2.5% interest and the child gets a debit card to access money or use in the shops. You should be able to transfer money into the account easily enough.

MsHoarder

LauraEd wrote: »

My daughter is taking a 6 week drama course over the summer holiday and will be away from home for most of the week. I don't want to give her a pocket full of cash to get her through the week for food and travel and am worried that she will not have access to cash in an 'emergency' situation. She will shortly be 16 and I am wondering if anybody knows of a bank account that I can open for her that will keep the cash safe and accessible, whist allowing me to transfer, if necessary.

Most high street banks offer a "children's current account" of some description, eg HSBC.This will let you transfer her spending money in via through faster payments (assuming eligable accounts on both sides) and give her a cash/debit card to get hold of the money.

HSBC is an example pulled at random, but most of these account have poor interest rates and clearly none will let a child have an overdraft, so the important thing is that they are able to access a branch. Why not suggest to her that she chooses an account as a lesson in managing her finances?

This plan does also assume that she will be able to get to a cash machine and not "kept in" all week at a reasonably secure site (ie closed boarding school). Check that she will be able to get to a cash machine! Although a cashcard might still bail her out at a train station trying to get home.

mbailey

Funness wrote: »

hi, does anyone know if this is true, my mother went into the Halifax to sort out the scam which they pulled off changing the child's regular saver to a young saver, she managed to change it to the new higher interest child's saver but was told my son is only allowed 1 of these accounts and that I could not open one, we both have been paying £100 a month for a number of years, is this true can a child only have parents and not grandparents, uncles paying into an account, or as usual the Halifax talking rubbish

The previous Halifax children regular saver accounts used to allow multiple accounts for the children, so parents and grandparents could all have accounts.

Unfortunately around Sept 2011 Halifax changed the rules when the changed computer systems and now it is limited to 1 account per childr only, regardless who the adult is.

Also with the previous Halifax regular saver accounts they just continued each year, but now at the end of the 12 months they change to young saver accounts, so you have to go into the branch and do all the paper work again for new children regular saver accounts.

I tried for 4 weeks to get an appointment at my local Halifax branch on a Saturday to open an account but failed.

This used to be a great account, unfortunately Halifax have made it almost impossible to use now.