Tax on Child Savings?

gozomark

Lets say the child starts working at 16, and isn't told about the account. What happens to the tax situation ?? Can the child be held accountable for income in their name they are not aware of ?

Lokolo

gozomark wrote: »

Lets say the child starts working at 16, and isn't told about the account. What happens to the tax situation ?? Can the child be held accountable for income in their name they are not aware of ?

I was going to mention this but I thought I cba as the OP isn't going to do it anyway lol.

opinions4u

gozomark wrote: »

Lets say the child starts working at 16, and isn't told about the account. What happens to the tax situation ?? Can the child be held accountable for income in their name they are not aware of ?

Yes they can. But an R85 declaration registered by a parent expires when the child reaches 16 and tax will be deducted unless the child signs their own form.

So the situation is only likely to happen if the child is a higher rate taxpayer aged 17!

A grandparent cannot register the R85 themselves unless they are the child's legal guardian.

gozomark wrote: »

The problem is, youwant to keep control of the account, but also not be liable to tax, and I believe you can't do both

You can if the grandparent opens the account as trustee with the child as beneficiary.

This gives the grandparent control as to when he/she chooses to hand the funds over to the grandchild.

CLAPTON

opinions4u wrote: »

Yes they can. But an R85 declaration registered by a parent expires when the child reaches 16 and tax will be deducted unless the child signs their own form.

So the situation is only likely to happen if the child is a higher rate taxpayer aged 17!

A grandparent cannot register the R85 themselves unless they are the child's legal guardian.


You can if the grandparent opens the account as trustee with the child as beneficiary.

This gives the grandparent control as to when he/she chooses to hand the funds over to the grandchild.

surely this doesn't apply once the child is 18?

opinions4u

CLAPTON wrote: »

surely this doesn't apply once the child is 18?

You can open a trustee account for an individual who is over 18.

It's unusual, but perfectly legal.

The only person who can register an R85 in those circumstances is the beneficiary.

Be_Happy

Thanks for all your input.

I'm going to have to make a choice of bank/building society to use and then discuss the best approach with them.

I wanted information here first as I had a very bad experience with a bank when taking over Power of Attorney for my sister. At one point her ISA money was paid into my account by the bank in error, using up my annual allowance and this took 3 weeks to sort out by bank head office and tax office, so I like to have some knowledge of any subject I'm discussing with them.

Anyway, thanks again