Smart Access from Nationwide

eldaniel · 9 July 2018 at 11:39AM

Hi,
I was thinking about opening Smart Limited Access saving from Nationwide in the name of my kids.

It says on Nationwide website that if the account is opened by an adult, the adult will be acting on behalf of the child (as a ‘bare trustee’). Although the account is in the name of the adult, the money in the account is held for and belongs to the child.

Our kids are very young. What is there to stop me to use it in 1-2 years time as i.e. mortgage overpayment on our house or spend it otherwise?
Thanks

MallyGirl · 9 July 2018 at 11:54AM

Nothing other than your own moral code

xylophone · 9 July 2018 at 12:05PM

https://www.nationwide.co.uk/-/media/MainSite/documents/products/savings/summary-boxes-live/on-sale-products/P3198-SmartLimitedAccess.pdf

If the account is opened by an adult, the adult will be acting on behalf of the child (as
a ‘bare trustee’). Although the account is in the name of the adult, the money in the
account is held for and belongs to the child.

This money is a gift to your children and you hold it as their Trustee - using the money as you describe would be a breach of trust.

https://www.telegraph.co.uk/finance/personalfinance/investing/11286926/Martin-Lewis-the-eight-questions-Im-always-asked-about-childrens-savings.html

Opening an account for a child with the intention of using the money for the donor's own use is at the least morally questionable and probably fraudulent.

http://www.legislation.gov.uk/ukpga/2006/35/pdfs/ukpga_20060035_en.pdf

And see here regarding the taxation of interest arising on a gift by a parent to his unmarried minor child (outside a tax privileged account like JISA).

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

Smart Access from Nationwide

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