Children have inherited money...what do i do with it?

meester

LucyTheDwarf wrote: »

Yet it's a fallacy that children don't pay tax. They have the same allowance as the rest of us.

Not entirely true... If the money comes from the parents, then they only have an allowance of £100 per year in interest. This is to deter parents transferring savings into their children's name to save tax.

opinions4u

meester wrote: »

Not entirely true... If the money comes from the parents, then they only have an allowance of £100 per year in interest. This is to deter parents transferring savings into their children's name to save tax.

Absolutely right.

Invest £2,000 in a child savings account at 5.55% and earn £111 gross.

If that money has come from parents, the interest should be declared and tax paid at the parent's highest rate. So if little Johnny is given that money by Dad, who pays 40% tax, then a £44.40 tax bill is coming your way!

If you can show that the money came from Grandma, then no tax is payable. But you may be asked to prove it.

It would be totally wrong to expect an adviser in a bank, on a salary of £13k, to be able to fully grasp the breadth and complexity of the tax system for each individual that they see.

Therefore the individual customer, or parent of the customer, has to retain responsbility for the tax affairs of their family.

Blame the government for the stupidity of the tax system. Not the bank.

jem16

Lokolo wrote: »

Unusual? Its near to the impossible - who would pay children more than minimum wage? I know I wouldn't pay a 12 year old more than £2 an hour to clean my car damnit!!

It doesn't have to be earned income.

My son received a pension from his late father's company which made him a taxpayer at age 15.

debbie42

LucyTheDwarf wrote: »

Yet it's a fallacy that children don't pay tax. They have the same allowance as the rest of us. It's just unusual that a child meets the £6035 income level to start paying tax.

As others have since posted, a child would only need £100 per annum in interest from money gifted from a single parent before being liable to tax at the parent's rate. At 6% they would only need less than a sum total of £1700 invested to exceed this. A child could quite conceivably have several accounts so an individual bank can't possibly know whether or not the tax should be paid gross or net.

Lottebear

We had our put into Bonds with NS and I which paid out when I was 21, this money I still ahve invested in different things, and hopefully will one day get me a house.

Treefrog

My children have some money that I want to make work for itself. I opened a Halifax regular savings account for them using money from their account but then had to use my own money to provide the month payments as the Childrens save4it accounts could not do standing orders. I transfered the save4it accounts to young saver accounts as I was informed in branch that these accounts could be accessed on the internet and standing orders could be set up. After being unable to see the accounts online or set up a standing order I spoke to some today who said I had been misadvised. I asked why childrens accounts could not work online or have standing orders the operator at Halifax did not know, so I have made a complaint. In the meantime does anyone know of a childs bank account for and an 8 and a 4 year old that can been done online and have standing orders that transfer money out of the account so I can make the most of the childrens money and not use my own?

butterflymum

Treefrog wrote: »

as I was informed in branch that these accounts could be accessed on the internet and standing orders could be set up. After being unable to see the accounts online or set up a standing order I spoke to some today who said I had been misadvised. I asked why childrens accounts could not work online or have standing orders the operator at Halifax did not know, so I have made a complaint.

Firstly, as this is an old thread, you may get more response by starting a new thread with your enquiry.

Secondly, no help to your question, but yesterday, in our local branch, I too was being advised to 'open the childrens' accounts online'. This was in response to my reaction at being told that I would need a half hour appointment booked to arrange changing the childrens' accounts from Save4it to the newer and better interest earning Young Saver account. Reason supposedly being, if I then came back to branch with the new accounts already set up online, it would take less than half an hour. Obviously, like that given to you, the info was incorrect. Anyhow, can I ask you, how straightforward was it to actually change the account in branch anyhow? Cashier I dealt with yesterday for initial enquiry, has told me to make the half hour appointment, bring the Save4it passbooks as those accounts will need to be closed and also, to open the new Young Saver accounts, bring all the relevant ID for the children and myself. This does seem a bit over the top considering a) they already had all the ID presented when the Save4it accounts were opened and (b) the children are, obviously, existing customers.