Serious Post about MONEY

Graham_Devon

Oh, and the main thing....

Tax....

She will have a tax free allowance, something like £5400 at the moment!?!

Now, it becomes difficult, and this is where a financial advisor could make sense, so will retract the statement above, but still, with this amount of money, not going to make much difference now...

'Gifts' i.e. deposits from relatives or friends are not taxed, so long as they don't go over the £5400 (approx) threshold (for which she'd need about 100k anyway.

However, if the gifts are from the parent, then when the interest goes over £100 in any year (around 2k in savings) that interest is taxable to the parent. So 20% tax has to be paid by the parent.

And thats where it gets tricky!!

Think it's different for child trust funds, though sure someone will be able to help you with that.

I don't know too much about it though....no kids! Sure someone here will know.

She should have had a £250 child trust fund voucher, and a child trust fund set up for her. She should get abnother £250 to add to this when shes 7. You can then add £1200 a year maximum, tax free.

And this is where I get stuck as I know nothing about them. But the £100 interest thing could be a sticking point. Just means you would need to fill in a tax return, very simple one.

Thats where I get totally stuck. Can understand it, but can't offer any advice!!

It's to stop parents holding money in their childs name and tax evading

Murphy_The_Cat

Just to give you another thought/idea.
have you considered 'Investing' rather than 'saving' ? There are more risks involved, but the potential gains over a savings account are considerable. Plus, if they are done in your name, via your annual ISA allowance, they will be tax free AND you will retain control over the money forever - something that you will lose with a CTF at aged 18 (or IIRC, 16 in Scotland).

just an alternative thought for you.



p.s. if you do choose the savings route, quite a few Building Societies offer preferential rates for children. If you have a local branch, you get the double advantage of taking Junior to the branch each week.month to get into the savings habit

Graham_Devon

Murphy_The_Cat wrote: »

Just to give you another thought/idea.
have you considered 'Investing' rather than saving ? There are more risks involved, but the potential gains over a savings account are considerable. Plus, if they are done in your name, via your annual ISA allowance, they will be tax free AND you will retain control over the money forever - something that you will lose with a CTF at aged 18 (or IIRC, 16 in Scotland).

just an alternative thought for you.

The only problem I can see with that (apart from the risk, which could be very low anyway) is how do you give the money to the child later on in life?

You can't give more than 3k as a gift without it getting complicated?

Murphy_The_Cat

Graham_Devon wrote: »

The only problem I can see with that (apart from the risk, which could be very low anyway) is how do you give the money to the child later on in life?

You can't give more than 3k as a gift without it getting complicated?

oh yes you can, but its a bit to complicated to explain briefly on here. I'll try and find a definitive link :beer:

Ophie

Thanks Graham and Murphy

At least there are two people not wandering round with their finger up their ar se tonight.

Suprisingly enough some people in the arms do have the ability to make coherrent posts in response to a question that didn't get any response in the 'right' forum.

Shockingly enough I'm doing this whole parent thing on my own and never having done it before advice about money and saving etc is really beneficial. But far be it from me to spoil your evening with having a serious 'conversation'. You don't like the post - don't read it any more. I thought I may get a friendlier response here than in a part of the forum I don't use... I hadn't banked on you!

Graham_Devon

Ophie wrote: »

Thanks Graham

At least someone isn't wandering round with their finger up their ar se tonight.

Suprisingly enough some people in the arms do have the ability to make coherrent posts in response to a question that didn't get any response in the 'right' forum.

Shockingly enough I'm doing this whole parent thing on my own and never having done it before advice about money and saving etc is really beneficial. But far be it from me to spoil your evening with having a serious 'conversation'. You don't like the post - don't read it any more. I thought I may get a friendlier response here than in a part of the forum I don't use... I hadn't banked on you!

So am I getting told off there or what!!?

Ophie

Graham_Devon wrote: »

So am I getting told off there or what!!?

nope... post was in response to

TheMysterious1 wrote: »

ermmm yes it says savings account help above the door here :rolleyes:

that.

Murphy_The_Cat

Ophie, are you interested in setting up Discretionary Trusts to avoid taxation on cash gifts to your children ? You can of course gift as much cash as you want to someone, as long as you live for seven further years, tax & hassle free.

Ophie

I'm not sure Murph, I dunno if that applies to me as I have nothing in the strictest sense at the minute to leave to her. No house or anything like that.

So maybe not but thanks for that link and I shall read it through and see if it applies. Blimey I hadn't realised it was this complicated!!

Perhaps I should go and see someone to help me out - but then it means paying them and I don't have the money to pay them - this account is mainly for grandparents as I can't afford that much, I don't think my contribution per year would go above £1200.

Lokolo

Ophie,

Don't want to sound rude but in future can't you just be patient?

Theres only a few people who are constantly on the Savings Board and you posted there and only waited 3 hours. At 11am a lot of people are at work so don't expect a lot of responses until the evening. If you do go back you should expect to wait a little longer.