Children's Savings

LauraR123

Hi, I wonder can anybody help me. My mum and dad want to give my two children (age 7 and 3) £3,000 pounds for when they are older, but my mum said she would like to put some sort of clause on the money so that they have to go through myself and my husband before they spend the money.

Does anyone know if it is possible and how it could be done.

Thanks

martinman3

It is fairly easy to do what your mother is suggesting by opening an account in trust for each of your children which allows the trustees to control the account.

You can either open accounts where you and/or your husband and/or your parents are trustees/signatories. If the you and/or your husband are the trustees then make sure that your parents write a note stating the amount of the gift and the date it is made to prove that the money didn't come from you if HMRC ever need to know.

Please note that special child accounts have clauses in the T&Cs which allow the child to gain control at specific ages. see this thread
http://forums.moneysavingexpert.com/showthread.html?t=2082161

As I mentioned in that thread you can also open some adult accounts in trust, usually fixed rate bonds, which may be more suitable if you do not expect to make withdrawals for a few years.

Beware that some child accounts at some banks are not really trustee accounts but are re: accounts where the money is treated as being the property of the adult(s) opening the account until the child is old enough.
A true trustee account will have a clause on the application form stating that the money is the property of the beneficiary not the person opening the account.

In any case you should also fill in a R85 form for each account to allow the interest to be paid gross of tax.

LauraR123

Thanks Martinman3, that's a great help.