Childs Savings & Tax

ydraigcoch

My Mother is wanting to open an account for her Grand Daughter. She is wanting to deposit a large sum of money in the account. What Tax implications are there in this sinario?

Thanks for any advice.

Lokolo

Technically none. As long as you can prove it was the grandmothers money then the child will not pay tax on the interest.

If you come into the unfortunate situation of the grandmother dying within 7 years there maybe some Inheritence Tax implications though.

cloud_dog

ydraigcoch wrote: »

My Mother is wanting to open an account for her Grand Daughter. She is wanting to deposit a large sum of money in the account. What Tax implications are there in this sinario?

Thanks for any advice.

1) You need to complete Inland Revenue form R85 so as to claim interest gross

2) As Lokolo says, retain evidence the deposit was from a grandparent (that way the £100 interest / parents tax won't be an issue)

3) I thought you could gift up to £3000pa without any tax implications (someone please corect if I am wrong).