Help needing an account that can't be touched until 18

ccstella

I'm needing help, my son has a compensation claim ready for settlement and his solicitor has kindly informed us we need an account that cannot be touched until he reaches 18 (we were told initially that the courts held the money until this time) I have tried a few of the high street banks who all informed me that they don't do anything suitable. A couple say I need the old "trust account" type thing.

Contrary_clive

Would a JISA not be suitable or is the amount too great?

xylophone

There should be no problem about holding an account in absolute/bare trust for your son.

http://www.osborneclarke.com/connected-insights/publications/the-powers-and-duties-of-bare-trustees/

The solicitor should be able to advise on this.

If the amount is large, you might wish to take the advice of an IFA as to whether the money should be/can be held on deposit and/or invested.
You would need to check on the court's requirements in this respect?

The account(s) will be held as Mr and Mrs X Trustees of Master X.

If the child's total income will be below a single person's allowance, an R85 can be completed for deposit accounts - if an investment yields interest rather than dividends, tax would be reclaimable.

ccstella

I've looked at this but seems that you can't put a lump sum in of the amount he's getting (but under the yearly limit) plus a lot are saying they are invested and don't think the courts would allow this

xylophone

The court requires the money to be held in cash accounts?

The JISA can be wholly in cash.

It might be possible to open an account in trust for your child and move the maximum subscription into the JISA in each tax year - this might well be a good idea if the compensation has to be held in cash because at the moment, the interest rate available within a JISA exceeds what is available in other accounts that would accept a lump sum.

http://moneyfacts.co.uk/isa/junior-isa/

http://www.moneysavingexpert.com/savings/child-savings-tax-free

Incidentally, your child is young enough for a JISA?

https://www.gov.uk/child-trust-funds/overview

It will be possible to convert CTF to JISA next tax year.

https://www.gov.uk/government/news/government-to-allow-child-trust-funds-to-transfer-to-junior-isas