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Tax on Designated Accounts

Hitting
Posts: 191 Forumite


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?.
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?.
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Comments
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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.0 -
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?0 -
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.0 -
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.0 -
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!0 -
http://www.hmrc.gov.uk/manuals/tsemmanual/tsem9520.htm
"A simple declaration is enough evidence that a bare trust exists."
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