Children's savings - £100 rule

PParka

Hi,
My children have been given some money by their grandparents.
This has been paid into their savings account that pays 0.25% interest!

If I move some of this money into my current account and then drip feed it into a Children's regular saver account, is it still exempt from the £100 interest rule for parents? Would the HMRC accept that it originally came from a grandparent?

Does moving it via my current account mean it would be classed as being from a parent (i.e. Me)?
(I have already given the kids some money, so they could go over the £100 interest limit if it is treated as being from me)

opinions4u

I would suggest you keep a manual record of the funds, proof of where they originally came from and date what movements there have been and are intended.

The chances of HMRC investigating the interest (unless the figures are significant) is close to zero, but having a piece of paper explaining it will fend them off. The act of clearing funds via your own account may not be ideal but I would be gobsmacked if a tax inspector took a hostile view to it.

Alternatively, if the child is old enough, you could open them an Expresscash account (I'm assuming this is Halifax) and pay the funds into that and have the child set up the standing order.

If the child qualifies for a Junior Cash ISA and you have your own Halifax Cash ISA there's a 6% rate available although access to the funds is deferred until the child is 18.

jackyann

I would certainly make sure you get JISAs if eligible (and the rules may be changing on Child Trust Funds). Although most JISA rates are not brilliant (but look at the guides, you can move them) what often gets missed is that once the child begins to earn, the interest will remain tax free - so can really be a good saver for a house deposit.
Also look at all savings accounts: many are not marketed at children but are open to them (ages vary)
And do look at local building societies (and some local credit unions) as some offer special rates to local children.
Is the current savings account one with limited withdrawals, or no system for setting up direct debits? You could consider transferring all of the savings into an account that does have that facility - then set up th drip-feed into a regular account. It would be more transparent.

xylophone

0.25% interest!

Why has the money not been moved to an account with better interest? http://www.moneysavingexpert.com/savings/child-savings-tax-free

If the money is now in the children's own name, the money is theirs and should not be moved into an account in your name.

https://forums.moneysavingexpert.com/discussion/comment/64320931#Comment_64320931 the links might be worth a read.