Child Savings + R85 Form Question
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twins_2_Be
Posts: 745 Forumite
Just had twins and will be setting up a building society account for each of them. I understand I need to complete the R85 form.
From previous posts (http://www.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Families;action=display;num=1066597412) I realise that the Inland Revenue wants to avoid parents using this account for their benefit. But if we have had uncles and grandparents give us cash for the children or in some cases written cheques out to me for the children, how can I be certain that Inland Revenue will definatley see this as their money and not mine (especially in the case that the cheque was written out to me).
Would careful record keeping on my part help to justify were all the money has come from. I guess if the money arrives in their new account only a month after they are born teh Inland Revenue should see that this is thei money and not mine.
Any guidance??
From previous posts (http://www.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Families;action=display;num=1066597412) I realise that the Inland Revenue wants to avoid parents using this account for their benefit. But if we have had uncles and grandparents give us cash for the children or in some cases written cheques out to me for the children, how can I be certain that Inland Revenue will definatley see this as their money and not mine (especially in the case that the cheque was written out to me).
Would careful record keeping on my part help to justify were all the money has come from. I guess if the money arrives in their new account only a month after they are born teh Inland Revenue should see that this is thei money and not mine.
Any guidance??
It is not MY fault that I never learned to accept responsibility!
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Comments
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Congratulations on the birth of your twins.
I became a father 11 months ago and I thought the same. However, as you mention a good tip is to write down who gave what and on what date the money was deposited into the account.
When you open a childs account you have to specify a trustee (open to corrections) and that could be you. Therefore you could depoist chq's in your name into the childs account. I know I have done this with Nationwide.
I shall try and find out more information on this and also I have been told there is a limit on how much even a child can earn in interest before it has been taxed. Again let me find this info and I will add another post.0 -
My impression from previous posts is that interest over 100 pounds would trigger taxation.
What I am not clear on is whether if we can demonstrate that this is not MY money but theirs, then they shouldn't be taxed unless they exceed the normal deductions for a taxpayer.
I will try calling Inland Revenue and see whether they will be able to clarify. I will let you know if they indicate anything interesting.It is not MY fault that I never learned to accept responsibility!0 -
Hi there ;D
Congratulations on the birth of your twins. I have identical boys aged three and although they are hard work, they are lush too.
Best wishes
Martin0 -
CONGRATULATIONS ON THE BIRTH OF YOUR TWINS!!!!
Torgwen.......... ...........0 -
You are quite right, twins_2_be, careful record keeping is the answer to this. You need something to show that the money came from someone other than the parents. I'm not sure exactly what records the Revenue expect to see - in the real world there's a limit to what you can do. I suggest you just write down names, dates and amounts of gifts and keep this safe. If there are any large gifts then it would be wise to get a letter from the person making the gift and keep this safe.
You may find my posts in this thread are also helpful:
http://www.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=tax;action=display;num=1084000157;start=1#1
I would be interested to know what the Revenue say when you contact them.
Andrew.0 -
Inland Revenue say that if it the child money and not yours then they can use their personal allowance (something over £4k).
If you use your money then you will run into problems when the interest is over 100 (or 200 if you are married).
I asked how this is triggered and they said that the Inland Revnue and provided with the interest info by the bank and then they will decide who they will challenge. I sounds as though the bank just give the interest tax free and don't get into act as the enforcer.
Keep good records but in many cases how can you keep records for an 80 year old aunt that sends cash in the post? I will have a spreadsheet will it all in there no matter how strange worry about Inland Revenue if/when the time comes.
BTW....Alliance & Leicester FirstSave have uped their rate to over 5% tax free and this was before yesterdays interest rate hike.It is not MY fault that I never learned to accept responsibility!0 -
Hi twins_2_be. Congratulations. I wouldn't worry too much about small gifts from grandparents/aunts/uncles/cousins thrice removed. What, I suspect, the Revenue are interested in are parents sticking large amounts of their savings into the childrens accounts.
I don't know this for a fact, but I think they will probably look for children where there is a large increase in their interest and where they find this they will want to know where it comes from.
It is worth noting that the limit for gifts from parents before it is taxed at the parents rate is £100 interest for each parent across all accounts, and not each account individually.0 -
twins_2_Be.
Terrible you have to worry about stuff like that at this wonderful time eh.
Anyway congratulations from a mum of 2 year old identical boys.
Have fun
Fiona
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