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Advice please on what to do with my children's inheritance?

When my father-in-law died I was appointed as the executor for his estate. After a long and complicated road I am nearing the end of distributing what is left of his estate, as decreed by his Will. Ultimately, my children will receive about £10,000 each which should be placed in trust until they reach the age of 21. My son is 14 and my daughter is 13 years old. My question is, can I place the money in a building society? If I can, will I (or the children) have to pay tax? I am assuming that I can open an account for my children in my name 'in trust' for each child. Or is there a better way to invest their inheritance? Please help!

Comments

  • anandp
    anandp Posts: 279 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    You can open a building society account in their name with you as the authorised operator until their 21st or 18th birthdays.

    Tax is only payable on the interest element and assuming all inheritance issues have been dealt with already and that your children do not have any other sources of income, the interest amount would fall under their tax-free allowance for £10k.

    You may need to fill in an R85 HMRC form to this effect (not sure if you need to for children) but your building society can tell you this.

    There are better ways to invest for the 8-9 year period you're talking about - though it depends entirely on a number of things such as:

    - do you think you will need access to the money in that time
    - do you want to take active interest in any investments, i.e. a FTSE tracker, Zopa.com, other
    - your attitude to riskier (than cash in a bank or BS) investments
    - whether the cash can even be invested in other areas under your children's names.

    Hope that helps.
    Interested in property investment, web tech, social media, forex, equities. Also a proud father & entrepreneur of sorts.
  • Thanks for the sound advice. I think I've decided to put the money into a building society account 'in trust' and I'll manage the account until my children reach 21. I'm not sure that it would be sensible for me to take too many risks with their inheritance as I'd never forgive myself if I lost some, or all of the money. Although, I do appreciate that there are inherent risks these days in placing one's money in any building society account. Are there any building societies you would recommend? Onece again, thanks for the advice.
  • Ada3050
    Ada3050 Posts: 227 Forumite
    Car Insurance Carver! Cashback Cashier
    I would be looking at National Savings, 100% guarantee, something like a index linked savings certificate would be suitable.
    Know the difference between what you WANT and what you NEED. :T
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