Child savings account & benefits

Caramelbutthorn

Hi,

Please can you help?

My mum would like to open a bank account for my son. If she opens it and is the only one who can access it until my son is 18 or whatever, will it affect my benefits? (I'm currently receiving hb, is, ctc).

This would have say £30k in it.

Many thanks,

Caramel x

laineybird2000

Can your mum adopt me please?

NotSuchASmugMarriedNow

Yes it would affect your benefits.

xylophone

If the account is in your child's name, holding capital donated by someone other than parents and you have no access to it, I fail to see how this can affect your benefits?

Presumably your mother would act as bare trustee for the child but you would have to sign any R85.

Your mother should be made aware that the gift once given belongs to the child absolutely - she cannot use the money as though it were hers because it wouldn't be.

The child would have the absolute right to access and control at 18 (16 in Scotland) - see here for R85 rules if the money is to remain in bare trust after the age of 16- any tax overpaid would have to be reclaimed on the child's behalf. http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

Does your child have CTF/JISA? The money in the savings account could be gradually moved into this. https://www.gov.uk/child-trust-funds/overview

A note should be made of the source and date of the gift for IHT purposes. http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

You could discuss with a benefits adviser at CAB?

letthemeatcake

My children's Grandmother opened accounts for them years ago and I have checked and double checked this subject many times over the years as I'm in a similar position. From what I have read as long as Grandmother is a signatory on their accounts (ie; they cannot access the accounts without her consent) then it is okay. The accounts transfer to sole control of the children when they reach 16 ad would then count for benefit purposes.

This is my understanding of the rules so could be incorrect.

Why doesn't your Mother put the money in an ISA Junior or CTF (depending on when the child was born) as I know they are exempt until the child reaches 18. I tried and tried to get my Children's Grandmother to put the savings in their CTF/ JISA accounts but she would rather keep the money in a lower interest paying account!

Edit;it is upto 17 years not 16.

Caramelbutthorn

Thank you all.
My dad died in 2012 so there was a bit of inheritance and then she sold her house in Menorca so she has a bit of spare cash.
My ds is only 14 months - they have stopped the ctf haven't they?
I know my mum wants to put something away for my ds for uni or whatever he wants to do with his life (hopefully support me financially )) )
I just think it would be extremely unfair if his savings which I cannot access would affect my benefits.
Thank you again xx

xylophone

My ds is only 14 months - they have stopped the ctf haven't they?

https://www.gov.uk/junior-individual-savings-accounts/overview

"Your child can have a Junior ISA if they:

are under 18
live in the UK
weren’t entitled to a Child Trust Fund (CTF) account"