Use your child - best child savings account

xylophone

But havent those kids already had gifts of free money from the government, plus a tax free haven?

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ChildBenefitandChildTrustFund/ChildTrustFund/AnintroductiontotheChildTrustFund/DG_193634

mbailey

Froggitt wrote: »

But havent those kids already had gifts of free money from the government, plus a tax free haven?

Yes point taken, they have received some money from the government and they do have a tax free haven, although as mentioned before with a limited list of providers offering lower rates that initial advantage will be decreased and soon gone.

I don't see any disadvantage for the government to just allow anyone with a CFT to transfer it to a JISA. Surely they want adults/parents to save for their children now and want to make it an incentive. Why over complicate the system and have different rules for children born between 09/2002 and 01/2011.

Also surely the government want to help simplify tax/banking and not over complicate it.

If you are wanting to invest in funds rather than cash, then JISA's have far more options open than CFT's.

Froggitt

Yup I agree

taffylass12

hi i have a 5 yr old grandson that i have'nt been allowed to see for the last 2 yrs due to my son and his girlfriend splitting up, i would dearly like to open a savings acccount to put the money i keep for him each week into, but they all ask for his birth certificate, which of course i don't have, i would like to be able to give him something when he is older, can you tell me if there is any type of account that does'nt require this? i am NOT trying to off set my income, i don't earn that much any anyway

ses6jwg

taffylass12 wrote: »

hi i have a 5 yr old grandson that i have'nt been allowed to see for the last 2 yrs due to my son and his girlfriend splitting up, i would dearly like to open a savings acccount to put the money i keep for him each week into, but they all ask for his birth certificate, which of course i don't have, i would like to be able to give him something when he is older, can you tell me if there is any type of account that does'nt require this? i am NOT trying to off set my income, i don't earn that much any anyway

You can apply for a copy of your grandsons birth certificate for around £9 if you know where he was registered.

http://www.direct.gov.uk/en/governmentcitizensandrights/registeringlifeevents/birthmarriageanddeathcertificates/dg_175689

There is nothing illegal about this. I did the same for my daughter when me and her mum split up.

kristenbarke

My daughter is now 2, since she was 1 we have been saving in the Halifax Regular saver at 6% interest for 1 year, this has now mantured so we are moving it to another account whch also pays 6% for 1 year. But at the end of each year that matured money needs to be moved to another account. Is the best option litterally opening a new bond for her every year this money matures, or are there other options out there which means i dont have to keep opening more and more accounts?

Thanks

xylophone

Be careful of "£100 rule" - http://www.hmrc.gov.uk/tdsi/children.htm
If you can't keep the money in the matured account then there doesn't seem much option?

You pay the money either into another child account or into any other account you can hold in "re"(bare trust) form?
http://www.direct.gov.uk/en/moneytaxandbenefits/managingmoney/planningyourpersonalfinances/dg_10013916
http://www.moneysavingexpert.com/savings/child-savings-tax-free

Barsiem

Hello all, please could someone clarify a point on child savings for me?

My question is regarding the £100 interest per parent rule that HRMC have. I have just opened a savings account for my daughter & will be saving £100 per month for her @ 6%. This will come under the £100 bracket. However as the years go by & I continue to save it may well be that the total annual interest goes above £100. Will this be taxable still? Or is there an allowance made for previous years savings? I suspect not but wanted to clarify!

Apologies if this question has been asked/answered before. I did a search & couldn't find anything!

Thank

xylophone

See this guidance and example from Northern Rock http://www.northernrock.co.uk/savings/learn/childrens-accounts/
The £100 rule applies separately to each parent. The £100 rule applies to income arising each year and it does not matter whether the fund 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 for gross interest.

snowcat53

Hence the importance of using Junior ISA or CTFs if possible, where all interest is not subject to these rules.