Child trust account holding the deposit for a house

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If the account is in your child's name, you have provided the capital and you are merely the Bare Trustee, then you have made a gift to your minor unmarried child. 

The money in the account and the interest arising belong to the child absolutely BUT  if greater than £100 per annum, is taxable on you.

See under "parental settlement"  here https://techzone.aberdeenadviser.com/public/iht-est-plan/Prac-guide-gifting-child-grand

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

If the money belongs to the child as above, it can only be used for her sole benefit. This would not apply to buying a house for your use as well as hers?

Ergates

Masha_2 said:

itsthelittlethings said:

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

eskbanker said:

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?

Thanks for your comment. I thought to rely in both banks where I have the trust accounts the fact that in one o them I was always moving money through and saving and using and giving back, etc to have something visible that would mean it's for my child, but the other one just built up with good interest rate for deposit with the understanding that the purpose is for the benefit of my child.

To be clear:   The bank account in the bit I've bolded, is that a "normal" account registered in your name alone?

i.e. it's just a standard savings account registered to Masha_2 that you've put money into with the intention of using it for your child at some point in the future - but there is no kind of formal arrangement around that intention.  

If that is the case, then it's your money in your account and you can do what you like with it.

If not - can you clarify what the set up is?

Emmia

Ergates said:

Masha_2 said:

itsthelittlethings said:

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

eskbanker said:

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?

Thanks for your comment. I thought to rely in both banks where I have the trust accounts the fact that in one o them I was always moving money through and saving and using and giving back, etc to have something visible that would mean it's for my child, but the other one just built up with good interest rate for deposit with the understanding that the purpose is for the benefit of my child.

To be clear:   The bank account in the bit I've bolded, is that a "normal" account registered in your name alone?

i.e. it's just a standard savings account registered to Masha_2 that you've put money into with the intention of using it for your child at some point in the future - but there is no kind of formal arrangement around that intention.  

If that is the case, then it's your money in your account and you can do what you like with it.

If not - can you clarify what the set up is?

My understanding is that the OP has put their savings into an account in the name of their child, rather than having the money in an account in their own name. 

Why they've done this, one can only speculate...

itsthelittlethings

You can’t just save money in your child’s name for your own purposes, then use it for yourself. At best, it’s a bit dodgy, at worst, it’s fraud.

Zanderman

Masha_2 said:

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. 

Where the money originated - in this case your accounts - isn't relevant if it's been transferred to an account in another name. It now belongs to the other. It is odd to see this as you keeping money in a secure place as you have - if this account is your child's name - simply given the money away. Kept it secure for your child yes, but it's not your money any more.

Using it for your house deposit is not, as others have pointed out, using it for the benefit of the child. Even if the child could be a part-owner it's complicating their assets in an unreasonably complicated way. Even if it was possible you risk them wanting their asset back, when 18 (soon presumably), and forcing you to sell.

YoungBlueEyes

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

How old is your child Masha? When will they be 17? A few months or a few years?