An account for a sixteen year old

Emmy

We want to find an account that pays a good rate of interest (obviously) for our daughter to open in her sole name (to avoid having to pay tax).

She has approx 1300. and we want to add to it each month, however it isn't an account that she will withdraw from.

Anyone know of any good accounts out there that will be suitable??

Emmy x x

[Deleted User]

Would be best to get a basic bank account and filter money into a regular saver or more then one regular saver.

All details on the main website.

agal

Emmy wrote: »

We want to find an account that pays a good rate of interest (obviously) for our daughter to open in her sole name (to avoid having to pay tax).

She has approx 1300. and we want to add to it each month, however it isn't an account that she will withdraw from.

Anyone know of any good accounts out there that will be suitable??

Emmy x x

Remember the tax position. You say you want to open the account in her name "to avoid paying tax". Your daughter has the same tax allowance as everyone else BUT if the money in her account comes from her parents the interest will be taxed as the parents' income after the first £100.

[Deleted User]

I didnt know that agal £100 per year is a very small amount of money

I guess this means kids dont have a 5225 quid tax allowance? 16s old enough to work?

Can kids have ISAs?

just found this -
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089574348,16470,
doesnt say anything about ages though

aleph_0

Yant1 wrote: »

I didnt know that agal £100 per year is a very small amount of money

I guess this means kids dont have a 5225 quid tax allowance? 16s old enough to work?

Can kids have ISAs?

just found this -
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089574348,16470,
doesnt say anything about ages though

They have the same tax allowance, the £100 rule only applies to interest on gifts from Parents, and applies until the child is 18. All other income is treated as it would be for an adult.

You have to be 16 to have an ISA.

Emmy

agal wrote: »

Remember the tax position. You say you want to open the account in her name "to avoid paying tax". Your daughter has the same tax allowance as everyone else BUT if the money in her account comes from her parents the interest will be taxed as the parents' income after the first £100.

After having three children and all having had savings accounts this is soething I have never been aware of..... rang the building soc and tax office (cos I was angry) and they said this was not the case ..... phew! you had me worried

agal

Emmy wrote: »

After having three children and all having had savings accounts this is soething I have never been aware of..... rang the building soc and tax office (cos I was angry) and they said this was not the case ..... phew! you had me worried

I'm afraid you've been misinformed. Try this link to Martin's own page on this http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089574348,16470,#maximising

Kilty_2

States on the R85 form I have lying here that savings interest is tax deductable if the money is from parents and it accrues interest greater than £100 per year.

Hence it's still lying here

A NS&I Direct ISA would be ideal (deposit £1000 then the £300 after it's open) but your daughter would require a debit card (Visa Debit or Maestro) in her own name to open one. Lloyds TSB Under 19's Account will provide her with one if she doesn't.

You could add to that up to a total of £3000 per tax year .

Nationwide's E-Savings (attached to a FlexAccount - she'd need to open one to get it) would also be an option for any money over the ISA limit. One of the best rates available for people under 18. (believe me - I've researched thoroughly!)

agal

Looks like a good plan to me, Kilty. My youngest is 14, going on 15 so I'll be revisiting this scenario next year.
It's just a pity the Nationwide won't give you a debit card until you are 18.

Emmy

Kilty wrote: »

States on the R85 form I have lying here that savings interest is tax deductable if the money is from parents and it accrues interest greater than £100 per year.

Hence it's still lying here

Okay.... so it is it earns more than a £100 in interest..... if that is the case then she is okay.

You just never know what to believe when you ring people, as one person says one thing and then another something else but I felt okay as they both said similar things :mad:

But if it is £100 interest then at the minute she doesn't get that much (£67 just added) a year.... will watch it for the future

Kilty_2

agal wrote: »

It's just a pity the Nationwide won't give you a debit card until you are 18.

Tell me about it, haha.

I have four bank accounts instead of two for that exact reason :rotfl:

Now if we could get a petition going amongst Nationwide members, suggesting they at least introduce Visa Electron if not 2 in 1 Visa Debit cards for under 18s, surely they'd need to respond, being a mutual society and such?