Childrens' savings accounts unknown to parents

Dot

I want to put money aside for my grandchildren, nephews and nieces but do not want their parents to know about it until I decide to disclose the accounts or (eventually) after I am dead. I want to be able to put money into the account as and when I decide - not regular contributions. The children range from three to ten year old and I would need the accounts to be in a name (or trust) other than mine - to avoid IHT

Any suggestions anybody?

Paul_Varjak

I know that a parent can open up an account for their child. The parent holds the account as a nominee, but with the child as the benficiary of the account. This can be done without the child knowing of the account.

Now the question is, can a grandparent do the same? If so, I guess all you would have to do is prove the existence of the child and their address (and, perhaps you are the grandparent) - for money laundering purposes! So, you may need a birth certificate and other identity (a child will not be on the Electoral Roll). This may be difficult to obtain without the parent's help!

I am sure there are others who know the ins and outs far better than me. Good luck!

Dot

If you reckon it can be done for grandchildren that would be a start (I actually hold their birth certificates) but nephews and nieces are more of a problem. Any idea of a company who would do it? I have, on and off, asked all sorts of places and each time draw a blank.

Reaper

I think what you want to do is set up a savings or investment account "in trust". It works like this:

You name a couple of trustees. These are the people who have the power to operate the account. You'd make yourself one and perhaps somebody else too.

The terms of the trust would say that the money would become available to the child at a certain age, say 18.

The good news is that the savings belong to the child, so there will be no inheritance tax. There is no need for the child or parents to know about it (unless you want them to be trustees of course).

More goods news is that they are simple and cheap to set up. Even free. Ask the company you plan to keep the savings with if they can set it up in trust for you.

Bear in mind that each contribution you make is no longer yours, so you can't take any of it back if you decide you were over-generous!!

Reaper

I just found some more info about "bare trusts" over at Motley Fool. Here is a link to it. It's not quite as simple as I thought, but have a read.

Paul_Varjak

I have had a look on the National Savings website and, apparently, National Savings have a trust account that may be suitable. However, you have to write to:

National Savings and Investments
Glasgow
G58 1AA

Just tell them what you wish to do and I am sure they can help.

Dot

Thank you Reaper: that is very helpful - I will be investigating that one further. In the meantime, if anyone else has any other suggestions or good investments, I will still be interested in hearing them.

Dot

Thank you Paul, I have written to National Savings for advice.

Fatboy_NSS

It's not as complicated as some of the posts here make it out to be. All we'd need at Abbey would be a birth certificate for the child, plus name and address ID for you (passport or driving licence + council tax or utility bill). There's no requirement for you to be the child's parent or legal guardian. The child would then be the legal owner of the money in the account but you would have to sign for any transactions. The only slight hurdle would be that only the child's parents can sign the R85 form to get gross interest, so if you really didn't want to let them know then the interest would have to be paid net of tax.

The Abbey kids account pays 4.5%. I know some other banks/building socs pay a bit more on their kids accounts and I'd imagine their ID requirements would be broadly similar.

Dot

Trouble is getting birth certificates for the nephews and nieces. I could probably obtain a copy without awkward questions but usually institutions want only originals.

Paul_Varjak

If you know their dates of birth I think you can go to the registrar of Birth, Marriages and Deaths and get certified copies. I guess you would have to go to the Registrar where the birth was registered. Failing that, Does Somerset House still exist?