Can I reduce tax on interest by putting money into child account?

housebuyer143

Can someone let me know if I can do this? What interest can a child earn before it's taxable and can it be in an easy access account where it's in the child's name but I am listed as someone who can also access it? 

sheslookinhot

Any money deposited in a child’s account becomes theirs. Are you trying to avoid / evade tax?

Flugelhorn

if the money is from the parent then I think the child  can earn £100 a year in interest before it all becomes taxable as the parents 

it is a an old trick that HMRC are well aware if 

Dazed_and_C0nfused

housebuyer143 said:

Can someone let me know if I can do this? What interest can a child earn before it's taxable and can it be in an easy access account where it's in the child's name but I am listed as someone who can also access it? 

£0.

Outside an ISA or pension wrapper all interest will be taxable.

If you mean how much can be earned before paying tax on it then it's £18,570, the same as anyone else (who hasn't applied for Marriage Allowance).

But once the money is provided by a parent it gets more complicated.

https://www.gov.uk/savings-for-children

housebuyer143

Flugelhorn said:

if the money is from the parent then I think the child  can earn £100 a year in interest before it all becomes taxable as the parents 

it is a an old trick that HMRC are well aware if 

Thanks, I am just trying to move some money around to reduce tax liability, but for £100 interest I don't think I can be bothered with that. 👍

I can't open a jisa or child trust because my son lacks mental capacity and I will have no end of trouble getting it out again.

surreysaver

A child's tax free limits are exactly the same as an adult's. Someone's age does not affect how much tax they are liable for.
Why can't you open a jISA? An adult opens one on behalf of a child anyway, their mental capacity (or lack of) is the reason an adult opens one. And money cannot be taken out of a jISA until the child is 18, except under very specific circumstances 

housebuyer143

surreysaver said:

A child's tax free limits are exactly the same as an adult's. Someone's age does not affect how much tax they are liable for.
Why can't you open a jISA? An adult opens one on behalf of a child anyway, their mental capacity (or lack of) is the reason an adult opens one. And money cannot be taken out of a jISA until the child is 18, except under very specific circumstances 

Because when the child gets to 18, they don't have the mental capacity to withdraw it or open a current account etc, so it runs the risk of it being trapped. 

Many people have been caught out like this putting in thousands into their child's account before realising they can't get it out without going through the court of protection. I would prefer to be my son's appointee rather than his deputy.

Keep_pedalling

surreysaver said:

A child's tax free limits are exactly the same as an adult's. Someone's age does not affect how much tax they are liable for.
Why can't you open a jISA? An adult opens one on behalf of a child anyway, their mental capacity (or lack of) is the reason an adult opens one. And money cannot be taken out of a jISA until the child is 18, except under very specific circumstances 

Because the OP is not giving money to their child they are trying to avoid paying income tax on their own savings by (in the words of Father Ted) resting the money in an account in the child’s name.

friolento

Have you exhausted your own ISA allowance?

What are your, and your son’s, pension provisions?