Savings for babies

matty2767

we are due a jnr in May. we would like to put some money aside each month for it, but i have a feeling in the back of my mind that it will be taxable. for some reason i also think that only a grandparent can give 'gifts' that are not subject to tax.

am i right?

if not can i assume i can open any account in his/her name and put money into it.

thanks

matt

Robert_Sterling

Your child will get a voucher for £250 from the government.
This is put into a Child Trust Fund.

e.g. Nationwide cash fund

The parents can then add up to £1200 every year and no tax is paid on the interest.

heppy23

When the baby is born you can open accounts on its behalf and have the interest paid gross by filling in an R85 form.
You can't open accounts in trust for unborn babies as far as I know.

You can open any savings account and put "baby fund" on the front with a post it note but you won't get the interest gross until the baby is born and you open an account for it in its own name.

tyllwyd

Have a look here http://www.direct.gov.uk/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/PlanningYourPersonalFinancesArticles/fs/en?CONTENT_ID=10014128&chk=ljIk%2B8

If you scroll down a bit, the second heading is on giving gifts to children, and I think that is what you are thinking about.

Heinz

matty2767 wrote:

we are due a jnr in May. we would like to put some money aside each month for it, but i have a feeling in the back of my mind that it will be taxable. for some reason i also think that only a grandparent can give 'gifts' that are not subject to tax.

Martin's 2 articles will help:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089574348,16470,

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1108986373,87407,

nilocmac

Ok I think I understand it now but I still have question that Martin seems to answer but then if I look at the HMRC site it doesn't directly answer my question.

If my child has £2000 in their account given by me does that mean every year they have to pay tax on it (if the interest is over £100). Also am I right in assuming I can I will not then be able to put anything into his account this year? Or following years?

Martin said "In practical terms this means you could put up to £1,850 in the 5.35% top paying children's account, and it wouldn’t be taxed, as that would generate around £99. Just to clarify, this doesn’t mean £1,850 every year; it’s the interest generated from all cash given in this and previous years." In the article above.