Use your child - best child savings account

mbailey

xylophone wrote: »

With regard to any money given by a child's parents to a minor or unmarried child, note the "£100 rule" - this does not apply to the JISA. I would always recommend that any money given by you (parents) outside tax exempt schemes is kept apart from money given by any body else. http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/SavingsAndInvestments/ISAsandJuniorISAs/DG_199672

I wish we had done that when we started saving for my daughters. They currently have savings accounts with money from friends, grandparents and parents all in one account. It is now a complete nightmare to work out which part is directly from parents and included in the £100 rule.

CrispinMurvi

Is it possible to open a bank account for our grandaughter (7 months old, born in the USA) in the UK with any associated child benefits. The money would be for her use on the family's planned return in a few years.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/45515326#Comment_45515326

From this thread it appears that there might be complications with a grandchild resident in the US?

Even were the child resident elsewhere outside the UK there can be difficulties in find a bank which will offer an account.
http://www.web40571.clarahost.co.uk/archive/saga/2012/20120501News.htm
"GRAND SAVINGS ACCOUNTS
“How do I open a savings account for my grandchildren – by the way, they live abroad?” It is a common question. And the banks seem to make it as difficult as possible. Halifax is the latest to insist that savings accounts cannot be opened for children who are outside the UK.

Some banks use money laundering laws or other excuses to exclude foreign residents. But HM Revenue & Customs confirms that there is no legal impediment to opening an account for grandchildren who happen to live abroad. And if you fill in a non-resident form R105 interest will can be paid gross, without income tax being deducted.

So if you want to open an account for grandchildren who live outside the UK ask your bank and do not take ‘no’ for an answer. It is possible."



It might be easier if you were to think of your own ISA as a savings vehicle for your grandchild - on return to the UK it should be possible for a JISA to be opened and for you to deposit a lump sum into it.

If you did not want to use a JISA then you could set up another "bare trust" type account at that time?

Otherwise you might try setting up a bare trust account with Nationwide International?

kathh

We want to start some sort of long term savings for our grandson, he's 1.
Monthly saving with lump sums on birthdays etc. Do you have any suggestions?

xylophone

See post 563 above.
See also the links in post 567.
Does your grandson have a CTF/ JISA?http://www.direct.gov.uk/en/moneytaxandbenefits/managingmoney/planningyourpersonalfinances/dg_10013916

jonnno

I've got a Halifax Children's Regular Saver for each of my 2 daughters which is due to reach its anniversary in a couple of weeks. Halifax have just sent me the letter explaining that I can complete the form to change the account to a Kids' Regular Saver which basically is the same as the Children's Regular Saver account was when I originally set it up.

This is fine for my younger daughter who is 13 but my eldest daughter is 15½. The Kids' Regular Saver is only available to up to 15 ... does this mean she can't convert her account. But even if she does it will be 6 months until she turns 16.

What options will I have for my elder daughter. The savings are for when she is 18 or older ... either for uni, car or wedding.

xylophone

http://www.halifax.co.uk/savings/interest-rates/personal-rates/#junior-cash-isa
If you opened a cash ISA with the Halifax?

hardpressed

xylophone wrote: »

See http://www.hmrc.gov.uk/tdsi/children.htm
You will be wanting to set up "re" (bare trust) accounts for the grandchildren (Lynda Bear re ....)
If your grandchildren are non-taxpayers (most likely unless they're child stars or models...) then an R85 should be signed by one of their parents so that the interest on the accounts can be paid tax free.

As you will see from the link, under current tax rules, the R85 can only remain in place up to the 5 April following the 16th birthday unless the account passes to the child at that age.

As you wish to retain control after that age, the R85 must be cancelled and the tax reclaimed on behalf of the child if he is still a non-tax payer - the link explains how this is to be done.

You can open any account that for which the provider will accept a "re" designation.

You could perhaps start with the "Little Rock" account which is available up to the age of 16 and then move the money into something fixed term for the last two years? http://www.northernrock.co.uk/savings/find/savings-accounts/Little_Rock_Access_Account_Issue_2/

The Northern Rock account sound what I want to put birthday and Christmas money in for my grandchildren. If I open it as a 're' account I can then change it to another account later if something better comes along, is that right?

xylophone

If I open it as a 're' account I can then change it to another account later if something better comes along, is that right?

Yes, if the account became uncompetitive, you could move the savings to another account held for the child.

ejv

If a child generates more than £100 interest in the course of the year, from money specifically given by each parent (or step-parent), this income is taxed at that parent's tax rate. So that's £200 for a couple with a child.

Is it £400 for a couple with 2 kids and £600 for 3 kids?

Halifax says:

HMRC limits the amount of gross income/interest that the parent’s’ or civil partner’s gifts can earn to £100 a year for each parent or civil partner

Or is it £200 for a couple with any number of kids?

it's the interest generated from all cash given in this and previous years.

What if the parent withdraws the previous years money+interest? Does the child account has a ring fence like ISA which once broken cannot be mend?Can't understand how this works:huh: