Tax on Child savings account

vagasv1

Am I correct in thinking. This is all 'for instance'

Year 1. I pay £1000 into my childs account @ 10% = interest of £100 - no tax
year 2. I pay another £1000 into my Childs account total 2100 @10% = interest of £210

do I pay tax on £210 or tax on the interest of the capital that I have paid in that year. = no tax again because it is just £100

thanks

Bean_Counter

I believe year 2 full interest is taxable. In this hypothetical situation, the account shoudl NOT have a R85 completed and interest should be paid net of tax.

Have a look at this link to HMRC website.

Cook_County

Bean Counter is correct.