Saving for children

Katie_P_4

i want to open a savings account for my child that they can't get access to until we decide that they are responsible enough to have whatever we have saved for them, whether that may be 18 or 21 or whenever. Do I have to open it in my name or can I open an account in their name with me having control over it? Would it automatically become their account when they become an adult at 18 despite me having control over it when they are a child still?

xylophone

http://www.hmrc.gov.uk/tdsi/children.htm
Note £100 rule, what happens when a child turns 16, and Trust Accounts and R85 - bare trust normally ends at 18- see http://www.hmrc.gov.uk/trusts/types/bare.htm

atush

In theory a bare trust stops at 18, but paperwork has to be filled out.

My son is 21 and it is still in a bare trust as we haven't got around to it.

xylophone

http://www.lawdonut.co.uk/law/personal-law/family-trusts-and-inheritance-tax/trusts-for-children-and-other-family-22-faqs

Question 5

atush

They have known from abt 16/14.

Yes well he wants mummy to take care of it still I guess lol. Too busy being a student to be bothered before now. But I have ordered the forms to be sent so he can register his own details with them.

He is graduating in June, and has a job lined up for September at an excellent rate of pay so I am cutting him loose (and will be charging him rent/board ;-) Will be an interesting feeling to be paid back for a change.

xylophone

atush wrote: »

They have known from abt 16/14.

Yes well he wants mummy to take care of it still I guess lol. Too busy being a student to be bothered before now. But I have ordered the forms to be sent so he can register his own details with them.

He is graduating in June, and has a job lined up for September at an excellent rate of pay so I am cutting him loose (and will be charging him rent/board ;-) Will be an interesting feeling to be paid back for a change.

Glad he's done so well!
However, before Q5 came Q4...
"4. What is a bare trust?

A bare trust is a very simple form of trust, where one or more trustees (also referred to as a nominee) passively holds the assets for the beneficiary. The beneficiary is entitled to both capital and income, and to take possession of the assets when they like – provided the beneficiary is legally capable (ie of sound mind and aged 18 or over).

Bare trusts are often used to hold shares for children under the age of 18. The trust can be created with minimal paperwork and expense, and can offer tax advantages (see 5).

While this can be a very simple and cost-effective way of passing shares to a child, it does have disadvantages. In particular, the child has the right to take possession of the shares at the age of 18 and deal with them as he or she sees fit. Some parents worry that this will result in the shares being sold and the proceeds wasted."

atush

True, but not is you raise them right. And keep the paperwork in a filke they cannot decipher the system of lol.

Really, they know but are not very interested except maybe when the statements come and I might tell them what it is doing. I have opened and read thru statements with them (esp bank ones) from when they could read as part of their financial education incl interest, how shares work, why we pay tax etc. As they don't seem to teach this stuff in school unless they take business or economics later.