Grandchild savings

Grandadsaver

I have building society savings accounts for my 4 grandchildren. Even though my total interest exceeds the £1000 tax free limit, I believe I shouldn't pay tax on the interest on these as I am their grandparent, whereas their parents would.
How do I ensure this happens though. The account is my name in trust for the child but it doesn't specify I'm a grandparent. The building society says its between me and hmrc. When I spoke to the hmrc helpline though they said it was up to the building society to report accordingly.
Anyone know who is right?

xylophone

If the accounts are held in bare trust, the interest belongs not to you but to each of the children.

The BS should not report the interest as yours as it is not yours.

In fact, even if a parent was the bare trustee, the interest would still belong to the  children and should be reported as such.

However, if a parent has gifted money to the account of his minor unmarried child and interest of over £100 per annum is earned

on that gift, that parent would have to declare that interest and pay tax as appropriate.

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

Have you checked the position with the BS?

Grandadsaver

Thank you so much for the answer.
Building society just said it was up to me to sort with tax office. 

DRS1

Have a look at the Ts&Cs of the account(s) and see if there is any mention of bare trust/holding on behalf of children.

Are the grandchildren named on the account(s)?

Or have you just opened standard savings accounts in your own name which you notionally allocate to grandchild A ,B, C and D?

Albermarle

For small children it is usually recommended to have a Stocks and shares Junior ISA, as it will very likely give a better return over many years than saving.

xylophone

Building society just said it was up to me to sort with tax office. 

Are you holding the accounts as bare trustee for the children?