Tax on Designated Accounts

Hitting

I have used the annual IHT Gift allowance to purchase a HL Vantage Fund and Share Acc. with it Designated in the initials of my Grandchild.At same time I have completed a HL Bare Trust election form with me as donor and also me as 1st trustee,parent as 2nd Trustee and grandchild as Benificiary.
I have not invested in a JISA as alternative since this has already been done by parent.
When I receive the annual Consolidated Tax statement, who should declare this info to HMRC?, should it be Grandparent or Parent or neither?.

xylophone

If the assets are held in bare trust, then they belong absolutely to the beneficiary of the trust and are taxed on the beneficiary except where the beneficiary is a minor unmarried child and parent/parents is/are the donors.

http://www.hmrc.gov.uk/trusts/types/bare.htm

http://www.hmrc.gov.uk/trusts/types/minors.htm

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem1563.htm

The beneficiary has his/her own tax allowance.

If any of the assets pay interest it is possible to claim back any overpaid tax on behalf of the beneficiary.

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/individuals/savings-income.htm

Should the income arising on the assets take the beneficiary over his/her tax allowance/cause him or her to go into a higher tax band, then this would need to be declared to HMRC.

Hitting

xylophone wrote: »

If the assets are held in bare trust, then they belong absolutely to the beneficiary of the trust and are taxed on the beneficiary except where the beneficiary is a minor unmarried child and parent/parents is/are the donors.

http://www.hmrc.gov.uk/trusts/types/bare.htm

http://www.hmrc.gov.uk/trusts/types/minors.htm

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem1563.htm

The beneficiary has his/her own tax allowance.

If any of the assets pay interest it is possible to claim back any overpaid tax on behalf of the beneficiary.

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/individuals/savings-income.htm

Should the income arising on the assets take the beneficiary over his/her tax allowance/cause him or her to go into a higher tax band, then this would need to be declared to HMRC.

The benificiary is a minor unmarried but as stated the parents are not the Donor.
What is the position in case above?

xylophone

The benificiary is a minor unmarried but as stated the parents are not the Donor.
What is the position in case above?

The case is as stated in my first post!

A grandparent has made a gift in bare trust to the minor child- any income or CGT tax thereon falls on that child as the beneficiary of the Trust.

See links.

xylophone

And this question was covered in your previous thread

https://forums.moneysavingexpert.com/discussion/comment/66820749#Comment_66820749

Incidentally, were the account merely designated and not in bare trust, the taxation position would be different - the assets would remain yours and be taxable as yours.

Hitting

xylophone wrote: »

And this question was covered in your previous thread

https://forums.moneysavingexpert.com/discussion/comment/66820749#Comment_66820749

Incidentally, were the account merely designated and not in bare trust, the taxation position would be different - the assets would remain yours and be taxable as yours.

How legal/official has the Bare Trust to be?

The Bare Trust form I have completed does not require any witness or official stamp although it is provided by the Investment House I have invested in.They state,to simply complete the form with names of donor,trustees and benificiary and retain ie they don't need to see details!

xylophone

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem9520.htm

"A simple declaration is enough evidence that a bare trust exists."