Property funds in child accounts

SDLT_Geek

The article makes it clear that the money belongs to the child.  It is not OP’s money any more.

grumiofoundation

noitsnotme said:

jimbog said:

https://www.thisismoney.co.uk/money/experts/article-4025172/Can-save-money-child-s-saving-account-better-rate.html

That article, whilst hinting it might not be ethically right, seems to almost encourage what the OP has done.  Even the quotes by the HMRC person only seem concerned about the parents paying any tax that might be due on the interest earned.  And that could be mitigated by the personal savings interest allowance, depending on the OPs situation.

From the article...

”Many may be adopting the tactic of opening accounts for children with traditional rates crashing and also lucrative high interest current account savings deals disappearing, including Santander 123 now offering 1.5 per cent rather than 3 per cent.

This Nationwide smart limited access account can be opened by anybody under the age of 17 by a parent as a trustee.

There is nothing illegal about the practice. However, there is a moral argument.”

Are they wrong?

Article does also say 

A spokesman from the HMRC said: 'The capital is given to the child, which means that it and the income arising from it no longer belong to the parent. 

noitsnotme

Its certainly not something I would do but it’s a poorly written article then as it is encouraging what the OP is doing.

Has anyone got a Telegraph subscription?  What does Martin Lewis say about it here, I can only see the strap line that says “...to the painful issue of parents needing to dip into their child’s accounts...“ -
https://www.telegraph.co.uk/finance/personalfinance/investing/11286926/Martin-Lewis-the-eight-questions-Im-always-asked-about-childrens-savings.html

*edit* I guess it says similar to what Martin says here - https://www.moneysavingexpert.com/savings/child-savings-tax-free/

“Most banks require a child to be at least seven before they can open an account for themselves, though they do all differ, so it's worth checking the specifics. Under-sevens require a parent, guardian or grandparent to set up an account and act as signatory.

This method can also be selected for older children. If it is, then usually until they're 16 the signatory can still manage and withdraw the cash without the child's approval. Many accounts have terms and conditions stating withdrawn money must be used "for the benefit of the child", but of course, this encompasses a wide variety of definitions.”

ratechaser

Well looking at the truly dreadful article on dealing with private parking tickets (which still talks about what to do if clamped on private land - a practise that was stamped out over 8 years ago), I think you have to take some MSE stuff with a big pinch of salt!

noitsnotme

ratechaser said:

Well looking at the truly dreadful article on dealing with private parking tickets (which still talks about what to do if clamped on private land - a practise that was stamped out over 8 years ago), I think you have to take some MSE stuff with a big pinch of salt!

I agree totally, but that MSE article on child savings, while stating the funds belong to the child, seems to encourage the use of child accounts for parents use.  If it really was illegal/fraudulent, would MSE be so blase?

“...including how to use their tax-free allowance for your gain.”

”You can use your child's tax-free allowance...

Using your children tax-efficiently sounds slightly callous. But if you are better off, so are your kids.”

Those are quotes from the MSE article.

I’d be interested to see what the Telegraph article says but I don’t have access through their paywall.

[Deleted User]

Since April 2016 the first £1,000 of savings interest per year is tax-free for basic rate taxpayers which opens up a nice little loop hole for parents putting money into their children's savings accounts.  Perfectly legal tax avoidance not to be confused with tax evasion which is illegal.  This forum has a board dedicated to Cutting Tax which is just another way of saying tax avoidance.  Who goes out of their way to pay more tax than is legally due?

I like this quote from Lord Clyde, "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

It's getting the money, which now belongs to the child, out the OP might struggle with.  I'd be interested to know what your solicitor advises @SuperCommuter, not that I have squirrelled money into a child's account before I am accused of any impropriety.  

AdrianC

noitsnotme said:

...but it’s a poorly written article...

Daily Mail article in "overblown scaremongering bearing little resemblance to reality" shock! Hold the front page!

noitsnotme

AdrianC said:

noitsnotme said:

...but it’s a poorly written article...

Daily Mail article in "overblown scaremongering bearing little resemblance to reality" shock! Hold the front page!

The Daily Mail article that echoes the same sentiments as Martin Lewis’s MSE article!!  Double shock horror! 

And potentiality the Telegraph article- triple threat shock horror!!!

🤷‍♂️

jbainbridge

OP - whatever the right or wrongs are I think you need to have the money in your name - certainly before you approach a solicitor. However part of their job will be to ascertain the source of your funds ... how you answer those questions (if they arise) I've no idea.

SDLT_Geek

@SuperCommuter Did you do the decent thing and recognise that the money in your daughter's account belongs to your daughter?  Does that mean you are having to borrow funds for your purchase?