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Best place for 16 year old's savings?
WNBRich
Posts: 73 Forumite
My son turned 16 in May, and his annual interest from the Nationwide Smart account is almost £100. It's possible that the taxman might tax me on the interest when it exceeds the £100. I'm thinking of suggesting to my son that he transfers his savings to an ISA, probably the Barclays Instant Access TAx Haven, which pays 6.25%. This way there is no risk of me being taxed on his interest, and Barclays is paying a better rate than Nationwide.
Do you think that this is a good idea?
Do you think that this is a good idea?
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Comments
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Why would you get taxed for his money?0
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It's the rule for when a parent has given money to a kid. If the total interest is under £100, it can be taxed as the child's money, if it's over £100 then the whole amount is taxed as the parent's income.Why would you get taxed for his money?I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Surely they don't class a 16year old as a child?0
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It wouldn't entirely surprise me if they did... Undoubtedly part of the reason for this rule is to stop parents from essentially using their kids as tax-free investments for their savings accounts.Surely they don't class a 16year old as a child?I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
My daughter is 16 and we have the same problem. I got her to open an ISA - we looked around at the best deals and she decided to go for a fixed rate, not with the Nationwide because of all the problems with the delays in opening accounts, which by the way Barclays have had as well.Books - the original virtual reality.
Tilly Tidying:0
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