Saving for god children

blacklab_2

My wife would like to start a savings account for her 2 god children. Is there a way to do this as they are not family and she does not want tax deducted. I hope this is a sensible enquiry. Thanks for any help. ::)

Rafter

You can gift up to £3000 per year or as many gifts of up to £250 each in a tax year without triggering any potential inheritance tax bills.

The godchildren can have accounts in their own name and therefore won't pay income tax as long as their earnings are below the personal allowance threshold.

If you want to keep control of the money you could open an ISA or use a tax free National Savings product in your own name but the gift may then be taxable when it is paid over.

Another option to consider is premium bonds which offer a return of on average around 5% but there is always the potential to win one of the £1m prizes - all tax free.

My grandfather set up a national savings investment account and then gave me an annual cheque to pay into it.  Became a tidy sum by the time I was 18 and enabled me to pay for some  travel during a gap year and fund university without getting seriously into debt.

Good luck.

R.