Child Halifax 10% RS Maturing Soon

trynsave

I have 3 children under 10 and save a small amount for each of them monthly in individual regular savings a/cs with Halifax.

They all mature in a couple of weeks and although the rate has now dropped to 6% I will continue to do this.

What I would like to know is when the funds get moved into their respective nominated accounts, me re each child, can I transfer the funds to my a/c with the intention of feeding the money back into the new a/cs up to the £100 pm limit?

I have been saving £20, £15 and £10 for each respectively, the eldest getting the most as I have less time to save for him than the youngest - hope that makes sense.

As a result my eldest has approx £300 whilst my youngest has just shy of £200. If I feed these monies into the 6% a/cs it will therefore take 2-3 months to get the full amounts in. Is this ok?

opinions4u

What you propose is more or less the way I go about things.

So yes!

mooch

trynsave wrote: »

can I transfer the funds to my a/c with the intention of feeding the money back into the new a/cs up to the £100 pm limit?

I'm in the same boat and desperate to find a qualified answer to this.

As far as I can see there is nothing stopping you transferring the money out of your child's account. The bank won't stop you and you have complete control.

However, I still wonder if the HMRC might see this as unlawful since it is the child's money and it should be spent on him/her or kept in an account under his/her name.

Otherwise there is nothing stopping any parent using a child's regular saver at 10% for 1 year (i know it's no longer 10%), then withdrawing the money and pocketing it or 'recycling' it with no intention of using it for the child. My point is that once the funds are withdrawn from the child's account, the onus must be on the parent to account for its use, otherwise the system is open to abuse.

Any thoughts appreciated.

opinions4u

mooch wrote: »

As far as I can see there is nothing stopping you transferring the money out of your child's account. The bank won't stop you and you have complete control.

Assuming the account is a trustee account, this is correct.

However, I still wonder if the HMRC might see this as unlawful since it is the child's money and it should be spent on him/her or kept in an account under his/her name.

It's nothing to do with HMRC. Their only concern will be the tax status on the interest accrued.

A trustee, even where no trust deed exists, should use the funds for the benefit of the child. If that means withdrawing it to pay for a fish and chip supper, trips to the cinema, paying the parents' mortgage to keep a roof over the child's head etc it would be hard for anybody to make a legal case that the trustee has abused their position. So moving the money from the Save4It to the trustee's personal current acconut and then back in to the child's regular saver account cannot be deemed to be acting against the interests of the child.

Otherwise there is nothing stopping any parent using a child's regular saver at 10% for 1 year (i know it's no longer 10%), then withdrawing the money and pocketing it or 'recycling' it with no intention of using it for the child. My point is that once the funds are withdrawn from the child's account, the onus must be on the parent to account for its use, otherwise the system is open to abuse.

The system is open to abuse, but the amounts involved are relatively small.

While a parent might sneak £100 a month in to the account and use the proceeds on maturity to pay for a new plasma telly, show that the child is not a beneficiary of this telly, or has not benefited in some other way from £1,200 during the saving period.