How much can we give our daughter this year

Sofa_Sogood

Robert_Sterling wrote:

I think a child is a child until they are an adult at 18 but I could be wrong.

I've been meaning to ask when a child stops being a child Bob.

Does anyone else know please?

charlieboycat

Sofa_Sogood wrote:

I've been meaning to ask when a child stops being a child Bob.

Does anyone else know please?

Where the person beneficially entitled to the interest is aged under 18 and unmarried, a valid certificate may only be supplied to the building society or deposit taker if the provisions of TA 1988 s 660B do not apply to the interest. TA 1988 s 660B broadly provides that income derived by an unmarried child under 18 from funds provided by a parent shall be treated for all income tax purposes as the income of the parent and not of the child. However, where the total income for any year of assessment from funds provided by a parent for a child does not exceed £100 TA 1988 s 660B does not apply and the income is treated as that of the child.

Where the £100 limit in TA 1988 s 660B is likely to be exceeded, or if there is any doubt as to whether it might be exceeded, a certificate for interest to be paid with no tax deducted may not be given. Interest on the child’s accounts concerned will therefore be payable subject to deduction of tax. The question of the aggregation of any part of the interest with the parent’s income, and of any repayment of tax due to the child (in respect of interest deriving from other sources of capital), will be dealt with by the Revenue on submission of the parent’s and the child’s income tax returns. Building societies and deposit takers have no obligations in respect of compliance with TA 1988 s 660B concerning the source of moneys in the account of a child aged under 18.

In England and Wales for the general purposes of income tax, capital gains tax, corporation tax and inheritance tax, full age is attained at the age of 18 and references to infancy are to be construed accordingly in all statutory provisions (Family Law Reform Act 1969 s 1).

These provisions are relevant, for example, to the provisions of the Taxes Management Act relating to infants and to the trustees and guardians of incapacitated persons and to the definition of “incapacitated person”.

The construction of deeds, wills and other private dispositions of property made before 1 January 1970 is not affected. For these purposes the old law continues to apply and a person is treated as being a minor until they attain the age of 21.

The equivalent legislation for Northern Ireland is in the Age of Majority (Northern Ireland) Act 1969 s 1.

The position in Scotland is more complicated. The equivalent legislation is found in the Age of Majority (Scotland) Act 1969 which states that formal majority is reached at the age of 18 (applied for tax purposes, as in England and Wales, by FA 1969 s 16(1)).

However, in Scotland a child who was a minor (formerly a specific technical term of Scots law meaning a girl aged from 12 to 17 inclusive or a boy aged from 14 to 17 inclusive) always had considerable legal capacity. In practice the Revenue always treated such minors in the same way in Scotland as in England and Wales, although this was of doubtful legality.

Legal capacity (as contrasted with majority) for those aged 16 or over (of both sexes) was confirmed and extended by the Age of Legal Capacity (Scotland) Act 1991 with effect from 25 September 1991. A person aged 16 years or over has legal capacity to enter into any transaction, subject to some limited exceptions.

Although persons aged 16 or 17 can now act with considerable independence in Scotland, until the age of 21 they may apply to the court for prejudicial transactions entered into before attaining the age of 18 to be set aside.

In the tax context, for most purposes of administration, an “infant” in Scotland is now defined as a person under legal disability by reason of non-age, which thus means a person under the age of 16.

However, for most other tax purposes, it is attaining the age of 18 which remains relevant for a child in Scotland to cease to be treated as a minor.

Sofa_Sogood

charlieboycat ... thank you so much for such a comprehensive reply, and apologies for not acknowledging your post before now. It must have taken you ages to collate and post the info.

I'll let my sister know - her two are 17 and 19 and I think she wanted to give them a bit of a 'nest egg'.

Thanks again

smashem

Robert_Sterling wrote:

It is OK for grandparents and indeed anyone who is not the child's parent ( God parents, aunts & Uncles etc ) to give a child as much as they like ( Subject to IHT rules ) and the child does not have to pay tax as long as the interest comes within the childs tax free allowance.

Could anyone explain how IR would be able to tell where the money has originated from. For example £10,000 in a childs account and we say that their Grandparents have been gifting money to them. Would Grand parents have to declare this to IR. If so could Grandparents gift money then I reimburse the Grandparents basically getting my money under a tax umbrella. Is a childs tax allowance about £4000 something. Ta

grumpyoldgit_2

Interesting discussion - in a similar vein.........

Is there any exemption for university fees and/or living expenses? - my daughter is doing a post-grad degree and was unable to obtain either student loan or bank funding so I am paying.
Would that count as "giving capital" and affect the limits per annum?

Cheers
GoG

Maximillion

Morning,
This is my first post, forgive me if I'm going over old ground for somebody;
I've just come across the halifax childrens regular saver offering 10% gross on monthly inputs of £10 - £100. as I understand it the interest is paid after 1 year of regular payments, subsequently the savings + interest are transferred to another savings account.
I believe you can earn up to £100 interest per year per child before incurring tax.

This seems Like a pretty amazing return regardless of the limits. so what is the catch?

Maximillion

whoops,
I just found the article regarding the account I was enquiring after. thanks any way.