savings in my sons name

iammumtoone

I claim benefits (single mother) I am aware of the rule that my son is allowed a maximum of 2-3K in his account (sorry don't know the exact amount as he hasn't got that), before I have to declare it.

What are the rules if his father wants to open him an account in his name as well and put more than the above maximum amount in. Will that effect my benefits and will I have to declare that he (my son as it will be in his name) has that account? I don't think ex will be letting me have the details of amounts (think he might want to put the max amount of his money into it to get more interest/divert it from his name).

Housing_Benefit_Officer

If you have no access to it and are not hiding your savings in your childs name then there shouldn't be any problem.

HappyMJ

iammumtoone wrote: »

I claim benefits (single mother) I am aware of the rule that my son is allowed a maximum of 2-3K in his account (sorry don't know the exact amount as he hasn't got that), before I have to declare it.

What are the rules if his father wants to open him an account in his name as well and put more than the above maximum amount in. Will that effect my benefits and will I have to declare that he (my son as it will be in his name) has that account? I don't think ex will be letting me have the details of amounts (think he might want to put the max amount of his money into it to get more interest/divert it from his name).

It's not your money anyway by what you say it's the fathers money and it counts as his. The amount of money your son has does not affect your benefits.

iammumtoone

HappyMJ wrote: »

It's not your money anyway by what you say it's the fathers money and it counts as his. The amount of money your son has does not affect your benefits.

But it won't count as the exs money as it will be in my sons name (I may be wrong but if you have money I though a lot of people do this - put money into their childrens name(s) to avoid tax on it?)

I believe the amount of money my son has does effect my benefits and I totally understand why that rule is in place. In theory someone could put thousands under their child's name and still claim full benefits.

princessdon

iammumtoone wrote: »

But it won't count as the exs money as it will be in my sons name (I may be wrong but if you have money I though a lot of people do this - put money into their childrens name(s) to avoid tax on it?)

I believe the amount of money my son has does effect my benefits and I totally understand why that rule is in place. In theory someone could put thousands under their child's name and still claim full benefits.

You don't avoid tax as money from parents once they earn only a little bit of interest is paid at your tax rate. My children pay 40% tax on their interest.

If YOU are the Tee on his account then benefits may look at this, I suspect the father will be tee on the account so would affect his benefits if he ever claimed.

HappyMJ

iammumtoone wrote: »

But it won't count as the exs money as it will be in my sons name (I may be wrong but if you have money I though a lot of people do this - put money into their childrens name(s) to avoid tax on it?)

I believe the amount of money my son has does effect my benefits and I totally understand why that rule is in place. In theory someone could put thousands under their child's name and still claim full benefits.

Then you would be wrong. Your children can have much more money than you....they could even have hundreds of thousands of pounds. If it's not your money to spend on the rent then it doesn't count and you get benefits to pay the rent.

princessdon

HappyMJ wrote: »

Then you would be wrong. Your children can have much more money than you....they could even have hundreds of thousands of pounds. If it's not your money to spend on the rent then it doesn't count and you get benefits to pay the rent.

Yes IF it is the child's, however, if it is a Tee account then the parent is the account holder on behalf of a child. I could legally withdraw all my children's savings tomorrow if I wished as the way THOSE accounts are set up, I have full access.

Otherwise everyone would save in the children's name, claim full benefits and dip in and out as if their own savings.

Clearly if the child was older and the account was solely theirs or a junior ISA then benefits would not look at this.

They ask you to declare savings for children on the benefit forms over an amount, so they clearly want to look at them.

To clarify children's capital does not affect it, but they ask you to declare them. I assume this is so they can look at those accounts and determine DOC, or tax avoidance etc.

They'd not force you to declare them if they never counted.

But OP. he can't use the child to gain tax benefits, as over £100 interest if came from a parent in a normal savings account is taxed at their rate anyway. Given that the savings rates are often lower than regular savers it makes no sense to even do this.

iammumtoone

princessdon wrote: »

But OP. he can't use the child to gain tax benefits, as over £100 interest if came from a parent in a normal savings account is taxed at their rate anyway. Given that the savings rates are often lower than regular savers it makes no sense to even do this.

I am now wondering what he wants an account for our son for then, he has recently had a relative die so I assume they must have left our son something.

princessdon

iammumtoone wrote: »

I am now wondering what he wants an account for our son for then, he has recently had a relative die so I assume they must have left our son something.

If the money was willed to your son, then it's not money HE gave him, money from none parents are exempt from the £100 a year limit.

If its HIS money and was willed to him then officially over £100 is on his tax code. It's also legally your sons if willed.

Mind you I'm not sure how many actually declare their child's interest to HMRC, I'm honest so I do, but not sure they'd know if I didn't.

paddedjohn

OP, is your ex on any benefits and trying to hide his inheritance?

iammumtoone

paddedjohn wrote: »

OP, is your ex on any benefits and trying to hide his inheritance?

No hes not on benefits, if its inheritance for our son then I don't suppose he wants it his bank account where he has to declare what his earns in interest (which will be a considerable amount).