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Investing for Children
ukdickie31
Posts: 522 Forumite
I have just become a proud dad (24/8) and family and friends have given me some money totalling £735. for my little one.
I have opened a Nationwide 'Smart' Account (on behalf of daughter - joint names opened it - my wife and I) and initially put the money in there. It pays 6.04% AER and has instant access. I have completed the relevant tax forms to get interest gross.
I have also arranged to pay the Child Benefit and Child Tax Credit paid into this account. Over this 1st year, this will be about an extra £2000 going in. That would mean by her 1st birthday, the balance would be just over £2500 and the interest would be over the £100 figure that Inland Revenue start to notice.
I do plan to use the Child Trust Fund Voucher as a separate Investment as the savings are locked in until her 18th birthday. I will top these up to the maximum £1200 over a year from my own money.
Both my wife and I are fully up to the cash ISA limits this year.
My questions are..
1) What will the tax man do on the 'Smart Account' held in joint names. Will the Inland Revenue get involved as the interest could be over the £100 figure where they tend to attribute the interest to the parent ?
2) I don't want risk so stock markets are not my investment route, but without having any spare capacity under the Mini ISA's, is there an alternative tax efficient route to save on a flexible basis ?
I have opened a Nationwide 'Smart' Account (on behalf of daughter - joint names opened it - my wife and I) and initially put the money in there. It pays 6.04% AER and has instant access. I have completed the relevant tax forms to get interest gross.
I have also arranged to pay the Child Benefit and Child Tax Credit paid into this account. Over this 1st year, this will be about an extra £2000 going in. That would mean by her 1st birthday, the balance would be just over £2500 and the interest would be over the £100 figure that Inland Revenue start to notice.
I do plan to use the Child Trust Fund Voucher as a separate Investment as the savings are locked in until her 18th birthday. I will top these up to the maximum £1200 over a year from my own money.
Both my wife and I are fully up to the cash ISA limits this year.
My questions are..
1) What will the tax man do on the 'Smart Account' held in joint names. Will the Inland Revenue get involved as the interest could be over the £100 figure where they tend to attribute the interest to the parent ?
2) I don't want risk so stock markets are not my investment route, but without having any spare capacity under the Mini ISA's, is there an alternative tax efficient route to save on a flexible basis ?
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