Child trust account holding the deposit for a house

Masha_2

When I explained the purpose of the savings in that account to the bank, which it is to buy a house for me and my child, I was confirmed that I could do any money transfers for the good of the child. my child is not yet 17 years old. I'm a bit unsure on how to manage this now. I am looking for a house and that account has the deposit in. are there any details I need to fix first before using that money for the deposit. I suppose there is no way to put down my child's name in the deeds of the house. 
I have another child trust that I used to save money and I moved it without any issues. my main purpose is to have her future a bit easier and if can do things now for her to have it later. If I get a house I want to make sure she gets it if one day I go for good. 
Any kind advice would be greatly appreciated.
Thanks

Grumpy_chap

Masha_2 said:

When I explained the purpose of the savings in that account to the bank, which it is to buy a house for me and my child, I was confirmed that I could do any money transfers for the good of the child. my child is not yet 17 years old. I'm a bit unsure on how to manage this now. I am looking for a house and that account has the deposit in. are there any details I need to fix first before using that money for the deposit. I suppose there is no way to put down my child's name in the deeds of the house. 
I have another child trust that I used to save money and I moved it without any issues. my main purpose is to have her future a bit easier and if can do things now for her to have it later. If I get a house I want to make sure she gets it if one day I go for good. 
Any kind advice would be greatly appreciated.
Thanks

If the money belongs to your child then a share of the house would need to belong to your child.

I believe that minors cannot own property.  Others may be able to confirm.

If the child owns part of the house, will they lose future first time buyer status?

xylophone

Who is the beneficial owner of the money in this account?

retiredbanker1

From HMRC 

AI Overview

Generally, no, a parent cannot access a child's trust fund. The funds are legally the child's property and can only be withdrawn by the child once they turn 18. Exceptions for early withdrawal are extremely limited, typically only in cases of the child's terminal illness, in which case a parent can apply to HMRC for authority. 

Standard access

• 18th birthday: The child can access the entire fund upon turning 18. 

Managed by parent: A parent can manage the account's investments and details before the child turns 18, but they cannot withdraw the funds. 

Exceptions for early access

• Terminal illness: 

  If the child is terminally ill, the registered contact can apply to HMRC for authority to withdraw the money. 

Court order: 

If the child becomes unable to manage their own financial affairs at age 18 or after, a parent or guardian may need to apply for a court order (such as a deputyship order) to manage the funds. 

Death: 

If the child dies before reaching 18, the investments in the trust become part of the child's estate. 

eskbanker

Masha_2 said:

When I explained the purpose of the savings in that account to the bank, which it is to buy a house for me and my child, I was confirmed that I could do any money transfers for the good of the child. my child is not yet 17 years old. I'm a bit unsure on how to manage this now. I am looking for a house and that account has the deposit in. are there any details I need to fix first before using that money for the deposit. I suppose there is no way to put down my child's name in the deeds of the house. 
I have another child trust that I used to save money and I moved it without any issues. my main purpose is to have her future a bit easier and if can do things now for her to have it later. If I get a house I want to make sure she gets it if one day I go for good. 
Any kind advice would be greatly appreciated.
Thanks

Could you clarify if there's any reason why she might need to continue to live with you for an extended period (e.g. disability, etc)?  If not and she's imminently reaching adulthood then it becomes harder to justify using her money to buy a house if she may not be living there for long and will be needing it for her own place....

Leaving your property to her in your will is an entirely different matter and doesn't warrant using her money towards a deposit.

xylophone

The OP has not stated that this is a CHILD TRUST FUND (CTF). The rules for accessing this are this are quite specific and except in the saddest circumstances, there is no access at all before the child reaches 18 at which point the young adult (and only the young adult) may access the money.

https://www.gov.uk/child-trust-funds

It is possible for money to be held in Bare Trust for a child  (or indeed for an adult).  The beneficial owner is the child (possibly adult) but

the Trustee manages the money on behalf of the beneficial owner.

The  beneficial owner of the money  has the right to access and control at age 18 (16 in Scotland) but may permit the Trustee to continue to manage the account.

In the case of the child, the Trustee may withdraw money from the Trust but for the sole benefit of the child (the beneficial owner).

The OP appears to control a certain account but it is unclear who exactly is the beneficial owner of the money within it or who provided it.

Is she saying that she has gifted money into Bare Trust for the benefit of her minor unmarried child? If so, this has tax implications.

Or has somebody else gifted money into Bare Trust for the benefit of the child?

If so, is she saying that she will use the child's money to buy a house  which she (as well as the child) will occupy? 

Suppose that the child did not want to live in the property but wanted to go elsewhere at age 18 or later?

A person under age 18 cannot be registered as the legal owner of a property, even if he or she is the beneficial owner because his or her money was used to buy it.   The Trustee would have to be registered as the legal owner but the child would have the absolute right to be registered as legal and beneficial owner at age 18.

The child would have acquired  a major interest in a residential property and therefore could not benefit as a first time buyer if wishing to acquire another property in the future.

Masha_2

Grumpy_chap said:

Masha_2 said:

When I explained the purpose of the savings in that account to the bank, which it is to buy a house for me and my child, I was confirmed that I could do any money transfers for the good of the child. my child is not yet 17 years old. I'm a bit unsure on how to manage this now. I am looking for a house and that account has the deposit in. are there any details I need to fix first before using that money for the deposit. I suppose there is no way to put down my child's name in the deeds of the house. 
I have another child trust that I used to save money and I moved it without any issues. my main purpose is to have her future a bit easier and if can do things now for her to have it later. If I get a house I want to make sure she gets it if one day I go for good. 
Any kind advice would be greatly appreciated.
Thanks

If the money belongs to your child then a share of the house would need to belong to your child.

I believe that minors cannot own property.  Others may be able to confirm.

If the child owns part of the house, will they lose future first time buyer status?

Well all the money in trust has come from my income and initially as a single mum I needed to have a secure place as in a trust but I always understood that could be used in many ways and managed by me. nevertheless I decided to use it as savings for our house. 
I checked about having a share of the property and it seems it's quite complex, better would be to separate other money, or really not use it all as for her own deposit when she wants to leave home. 

Masha_2

xylophone said:

Who is the beneficial owner of the money in this account?

I know when my child turns 18 then she is the sole owner, but in the meantime I can manage the account. 

Masha_2

xylophone said:

The OP has not stated that this is a CHILD TRUST FUND (CTF). The rules for accessing this are this are quite specific and except in the saddest circumstances, there is no access at all before the child reaches 18 at which point the young adult (and only the young adult) may access the money.

https://www.gov.uk/child-trust-funds

It is possible for money to be held in Bare Trust for a child  (or indeed for an adult).  The beneficial owner is the child (possibly adult) but

the Trustee manages the money on behalf of the beneficial owner.

The  beneficial owner of the money  has the right to access and control at age 18 (16 in Scotland) but may permit the Trustee to continue to manage the account.

In the case of the child, the Trustee may withdraw money from the Trust but for the sole benefit of the child (the beneficial owner).

The OP appears to control a certain account but it is unclear who exactly is the beneficial owner of the money within it or who provided it.

Is she saying that she has gifted money into Bare Trust for the benefit of her minor unmarried child? If so, this has tax implications.

Or has somebody else gifted money into Bare Trust for the benefit of the child?

If so, is she saying that she will use the child's money to buy a house  which she (as well as the child) will occupy? 

Suppose that the child did not want to live in the property but wanted to go elsewhere at age 18 or later?

A person under age 18 cannot be registered as the legal owner of a property, even if he or she is the beneficial owner because his or her money was used to buy it.   The Trustee would have to be registered as the legal owner but the child would have the absolute right to be registered as legal and beneficial owner at age 18.

The child would have acquired  a major interest in a residential property and therefore could not benefit as a first time buyer if wishing to acquire another property in the future.

It's not a CTF it's a bank account with the trust aspect on it, when I move some money it comes as if it were my account. I haven't heard about CTF. 
And yes, this specific one states that to be managed for the benefit of the child. I asked this to the bank that I was saving for the benefit of my child and that was okay as I was observing how will I need to move money. it all seems clear to me, but just checking, the bank agents sometimes are not very well trained. 
I have another bank trust account and wanted to remove the trust aspect of it and be managed by my child. I was asked by the agent if before doing that I did want to move the funds from that account. 
and I asked also about using the trust account to fund a mortgage and if there was something I should be aware on doing so. and I was told that was okay, since I'm managing the account. 


Thanks for that information, I read something like that too, about having major interest of the property. That would be a bit risky for me and for her. I would overall want protect that having it for her when she needs it. 

eskbanker

Masha_2 said:
Well all the money in trust has come from my income and initially as a single mum I needed to have a secure place as in a trust but I always understood that could be used in many ways and managed by me. nevertheless I decided to use it as savings for our house. 

Masha_2 said:
It's not a CTF it's a bank account with the trust aspect on it, when I move some money it comes as if it were my account. I haven't heard about CTF. 

And yes, this specific one states that to be managed for the benefit of the child. I asked this to the bank that I was saving for the benefit of my child and that was okay as I was observing how will I need to move money. it all seems clear to me, but just checking, the bank agents sometimes are not very well trained. 
I have another bank trust account and wanted to remove the trust aspect of it and be managed by my child. I was asked by the agent if before doing that I did want to move the funds from that account. 
and I asked also about using the trust account to fund a mortgage and if there was something I should be aware on doing so. and I was told that was okay, since I'm managing the account.

Did you have any legal advice when initially setting up the trust account?  It sounds like you're potentially relying on bank staff who may not be in the best positions to understand all the legal nuances of child trust accounts and beneficial ownership of the funds, etc, but did someone qualified advise you that such an account would be a suitable vehicle in which you could save a deposit for a property that you want to buy?

itsthelittlethings

Why didn’t you just save up to buy a house in your own bank account?