Halifax help please...

madeinleeds

Hi all

3 years ago, my son was given a lump sum of money that we decided to put away for him. He was 7 at the time.

Back then, the Haliax was doing a 6.5% p.a 3 year guaranteed reserve, so we went to speak to them.

We were told that as it was for a child, the interest would be tax free, so we went for it.

As we were putting this in place, we asked what would happen to the money should anything happen to our boy and to cut a long story short, we were advised to add my wife as a trustee on the account.

3 years later, this has matured, however the account has been taxed. This appears to be an error on the banks side, but they are saying we have to take this up with the tax man in order to reclaim the money.

As you can imagine, we were dissapointed & the girl was helpful enough & advised us to lodge a formal complaint with the bank. After being customers of the Halifax for over 20 years, we were against this at first, but we went though with it in the end.

We are now waiting for customer service to contact us, but they have a backlog and the lady said it could be a few weeks.

My question is, if the bank come back and say we still have to speak to the tax man - is this correct and how do we go about it?

Thanks

Lokolo

Get a tax certificate and fill in an R40 form

jackieblack

You have to complete an R85 form to get interest paid gross.
If you haven't you can reclaim the tax.

Have a look here

madeinleeds

Thanks - reading through that - it looks like we won't get a lot of it back?

Edited - This £100 rule - seems to be related to us giving him the money - its the Bare trusts I think we need

Thanks!

jennifernil

If he was given the money by someone other than yourselves, the £100 bit does not apply.

A parent can be a trustee on a child's account without it affecting the tax status.

madeinleeds

Thanks for the clarification - I wish we could afford to have given it to him, but its money that had accumilated over 7 years from various freinds and family members. He will be one lucky lad when he is older!

opinions4u

If the account has matured, and the funds remain in a "Matured Funds" account, registering for gross interest now should recalculate any tax deduction made in the current tax year.

If you've already moved the funds away from that account and closed it, just fill in a R40 form and send it to HMRC. You'll get the tax deduction back that way.

madeinleeds

Hi all

Thanks for your help - just to say that the Halifax actually rectified this without us having the need to contact the tax office.

Now we just need to find another long term account to invest in by the 27th July (any ideas welcome!)