Is it viable to use a childs account for saving???

Milarky

saver smurf,

Are there any 'approved' ways around this restriction on parents giving money to their children then?

For instance, if it is a 'payment' or a 'consideration' then the Inland Revenue loves that because they can tax it...

Yet if the child genuinely carries the same personal tax allowance from birth as everyone else [£4745 this year] they could technically 'earn' this as pocket money during the year and suffer no tax, could they not? They would have £3000 'income' that they then saved, and interest on about half of that at 5% (say) - about £75. The following year they could repeat this and have £6000 in their own name and earn approx £225 in interest.

In order for the Inland Revenue's rule on 'parental gifts' to remain effective in these circumstances it would be necessary to prevent parents from 'employing' their children alogether [because 'earned income' is not a 'gift' and vice versa]. Am I correct in assuming that this rule is there simply to 'deter' parents from taking such creative measures in the first place or that the creative measures themselves constitute tax evasion?

Thanks in advance

M

System

hi.........who has money once they have teenagers ?

Would you trust your teenage daughter with your savings?

Is there a facility to open these accounts in secret ?

puzzled parent ???

Pink.

I opened building society accounts for all three of my children at birth.

The money put into them would be small amounts from me over the years, rarely more than £20-£30 and
birthday/Christmas money sent from relatives.

Interest this year amounted to
£71.06 for first child
£52.59 for second child
£30.88 for third child.
Total £154.53

Surely according to above, this means as I am holding all these accounts in trust and they have earned over £100 in interest that they will be taxed at adult rate?

Or am I just confused?