Money in Court Funds Office special account

nat_b

Hi,

My daughter was awarded a significant amount of money in a civil case that the Court instructed to be held in a Court Funds Office special account. The interest rate is 0.5%.

When my daughter is 18 she will have control of the money, up until then I can apply to the court to make payments for her needs but have been told by the solicitors it's not my money etc can only be applied for her benefit.

Does anybody know if I need to declare this money to tax credits? The account they set up is obviously in my daughter's name.

thank you

Reaper

The interest earned will belong to the child, and the Tax Credits calculation ignores child income.

xylophone

That is a very poor rate of interest and the child is losing out to inflation.

Have you approached the court (perhaps via a solicitor) to find out whether a bare trust can be set up? Would it at least be possible to find out whether the appropriate annual allowance can be paid into a CTF/JISA for her?

Reaper

xylophone wrote: »

That is a very poor rate of interest and the child is losing out to inflation.

Have you approached the court (perhaps via a solicitor) to find out whether a bare trust can be set up? Would it at least be possible to find out whether the appropriate annual allowance can be paid into a CTF/JISA for her?

I don't believe that is possible. The only option is to put some of it into equities, but even that is often not allowed and it is forced to stay in the rather rubbish Special Account:

Each case is different, but as a rule, where the award is for £10,000 or less, or has less than 5 years until the child reaches 18, or the court has directed maximum income, all the money will be deposited in the Special Account.

http://www.justice.gov.uk/protecting-the-vulnerable/cfo/childrens-accounts

Ifts

xylophone wrote: »

That is a very poor rate of interest and the child is losing out to inflation.

The OP is not the only one losing out due to the very poor rate of interest thats paid on cash left in court accounts -

Victims lose out on cash left in court accounts:

http://www.independent.co.uk/money/spend-save/victims-lose-out-on-cash-left-in-court-accounts-7962505.html

xylophone

up until then I can apply to the court to make payments for her needs

In view of the above I would still approach the court to find out if CTF/ISA was a possibility. Nothing is lost by asking.

According to link above, an alternative to the Court Account might be possible.""But people can make alternative arrangements to improve returns."

And "He urged those looking after the affairs of people given personal injury awards to look at alternatives to the Court Account".

nat_b

Thank you for the replies. I've been advised by the solicitor to seek financial advice as the interest is so low. I was more just worried that I would be liable for my daughter having this money but now I realize they don't count it. Thank you all again.

xylophone

I've been advised by the solicitor to seek financial advice as the interest is so low.

In your position I'd take his advice!