savings for children

robnye

my wife and i currently have several thousand pound  saved for our 3 children. (they are 8/12/14)

having read a few of the topics on this board, regarding giving money to your children, i am unsure how to move the money forward.

at the moment it is all in my wifes name (to avoid the tax - as she is doesnt pay tax)

the money is tied into several different bonds, that start to mature over the next 3 years.
we also pay a small amount into their own savings account monthly (£5 each - £180 per year) as extra pocket money
we also pay £30 per month into a savings account (mini ISA) in my name, which we have moved into bonds once it reaches £1000.

so
should we continue to invest the money in my wifes name ( as now)
or
should we start to move the money into the kids names (as and when the bonds mature).

I understand that we can give/invest in their names enough to make £100 of interest each

we dont want them to be able to control the money, any access would be through us, on an as and when situation (preferably when they are 18'ish)

How much can we give to them (if they where 18 now - would it be reliant on them paying income tax?)) without causing them or us tax problems? ( i realise this can/will change as the years roll on)

any sugggestions would be helpful

Robert_Sterling_3

It is not "What account the money is in" which matters it is "Who gives them the money".

Each of you can give each child an amount of money in total which does not produce more than £100 in interest per annum [ £200 per child per year all in ]

So they can have in the region of £4000 in total from your combined gifts.

If your wife does not have much income of her own then by all means give her any amount you like ( tax free interspouse gift ) and let her give it to the children. No probs.

It is best to keep that in a separate account from the account in which they keep money from any source other than your good selves.

It is OK for any one else to give the children money and if they do then the income from it is considered to be that of the child.  Each child can have about £80,000 each with interest tax free so perhaps you will ask for advice again when they have got about £250,000 between them.

These rules don't seem very watertight to me however they are the rules and far be it from me to suggest any ways of circumventing them.

P.S.  It is dangerous to "Fro" your children as per your thread title  ;)

dunstonh

The childrens trust fund is being launched soon which allows £1200 per child per tax year tax free.

robnye

The childrens trust fund is being launched soon which allows £1200 per child per tax year tax free.  

wher can i get more information about this?

are these trust funds, controlled by parents/adults on behalf of children?

Each of you can give each child an amount of money in total which does not produce more than £100 in interest per annum [ £200 per child per year all in ]

So they can have in the region of £4000 in total from your combined gifts.

so we can give an amount of savings producing up to £600 per year, between the 3 of them!
so at the moment, if we leave it in my wifes name, once she starts to reach tax paying level, we would then have to move it into the kids names.

Robert_Sterling_3

About £6000
Actually up to the point at which each child separately is getting £200 in interest.
You must EACH give the children half of the money
but as passing money backwards and forwards between husband and wife is tax free this is easy.

Once you get above the £200 interest per child threshold the child concerned gets no tax free interest on that account and from that point onward your wife must give them all the money and you must give them none to make the most of her tax allowance.





Here is The Child Trust Fund

dunstonh

Many providers havent announced their CTF yet but it will come in many investment flavours such as cash, OEIC/UT funds and with profits funds.

It isnt launched officially until April next year although some friendly societies are trying to get ahead of the game. Personally I would wait until launch before committing yourself with a provider. Doesnt stop you doing something temporary between now and then.

isasmurf

I'd be careful with giving money to your children. Where does the £180 a year that your children save now? If it's from there pocket money then this will also be counted as gifts.

wher can i get more information about this?

are these trust funds, controlled by parents/adults on behalf of children?

See my post in this thread for more info on the CTF.

dunstonh

Tell them to get a move on.

i think they are being more cautious this time in case the Govt does another ISA on them.

With ISAs, many of the companies got their marketing material ready based on the Govt said ISAs would be and then three months before launch, the Govt made changes which were not expected. Many had to reprint and start again.

robnye

I'd be careful with giving money to your children.  Where does the £180 a year that your children save now?  If it's from there pocket money then this will also be counted as gifts.

It is additional pocket money to cover, holiday, trips, bigger items that normal weekly pocket money wouldnt cover. Also some birthday money is paid in.

it is paid into individual savings accounts for them, the accounts are in their names, but controlled by me and my wife.

solomans

reps added !! .

soolin

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