Use your child - best child savings account

$17mma

It doesnt say how much is needed to open each account? any ideas

deefadog

We just did this last week! I did it all on the phone and the guy was really good! I opened up the regular saver and save4it account, we can transfer her existing balace to the save4 it account and DD the max each month to the regular saver, then after a year it will be put back into the save4it account!

Saves so much hassle and cracking interest!

grumbler

deefadog wrote:

..and DD the max each month to the regular saver,...

I think you meant Standing Order ...

deefadog

yes

But i just got back and you can't do a Standing Order from the save4it to the regular saver, dumb git on the phone said it was fine!

So changing the family allowance into this and an extra one from myself!

isasmurf

I just want to pick up on a few points in the these last few posts.

grumbler wrote:

It's not a bank's job to do this. And you can have many accounts with the same bank of different banks. I think, you must declare it, but am not sure that you must do it on your tax return. The other way is to spread money between two or more accounts so that those registered to recieve interest gross don't generate more than £100.

Spreading it across several accounts wouldn't make any difference. The rule is generating £100 interest in total across all accounts.

Tracyk wrote:

Not tax avoidance if the grandparents are depositing the money. and I know about IHT probs.

It depends the reason why the grandparents are depositing the money. If it is a gift to the child, then no there's nothing wrong with that. If it is to hide their savings from the taxman/benefits agency then not only is it tax evasion, it is fraud as far as the benefits agency would be concerned.

grumbler wrote:

I am sorry, but you haven't convinced me. If account is registered to receive interest gross (R85), bank cannot deduct tax. The most it can is to report to IR.

You're right. Once an R85 has been completed for an account interest must not be taxed until the investor de-registers the account or the bank receives a de-registration notice from HMRC.

grumbler

isasmurf wrote:

Spreading it across several accounts wouldn't make any difference. The rule is generating £100 interest in total across all accounts.

What I meant was splitting savings in two parts. The first part generates less than £100 and is regestered for tax-free interest. The other part is not regestered to receive interest gross (tax-free). In this case you don't receive more than £100 untaxed interest on child's savings.

fagun

grumbler wrote:

What I meant was splitting savings in two parts. The first part generates less than £100 and is regestered for tax-free interest. The other part is not regestered to receive interest gross (tax-free). In this case you don't receive more than £100 untaxed interest on child's savings.

My understanding of the rule is that if more than £100 (per parent) is earnt, then the whole amount is taxable.

grumbler

fagun wrote:

My understanding of the rule is that if more than £100 (per parent) is earnt, then the whole amount is taxable.

I've had another read of IR wording (Interest on childrens savings) and agree that you are absolutely right...

If gifts from a parent produce more than £100 gross income a year, the whole of the income from the gifts is normally taxed as that parent’s income.

punkrocket

Hi, This is my first post

I was in the process of opening an account online for my 2 year old daughter with Saffron Waldon Herts & Essex Building Society when it asked whether I wanted to be a Nominee or a Trustee. Is there a difference? As a parent should I be one or the other?

Cheers!

ReportInvestor

In the case of the SWHE it said on the form that trustee accounts will have interest paid net.

So it sounds like you want to be a Nominee if you want the interest paid gross.

But ring them up to double check.