Savings for nehew / niece

mbchfmb2 · 9 January 2018 at 5:34AM

I want set up some kind of savings account for my niece / nephew but I'm not sure of the best way to do it. I've thought about a Junior ISA but would prefer to not just let them have access to it at 18. Ideally I'd like to let them have access to the money at 21 or when they want to use it for education / deposit etc

Sea_Shell · 9 January 2018 at 7:50AM

I don't think as Aunt/Uncle you're able to open any accounts yourself. It can only be parents or Grandparents (not fair in my opinion). So really you have to either arrange it via them, or keep the money yourself and "ringfence" it. But that can cause it's own issues if you were to pass away unexpectedly.

Keep_pedalling · 9 January 2018 at 11:07AM

How old are they now?

Kim_13 · 9 January 2018 at 10:17PM

With child savings accounts, the money is legally the child's, so they can withdraw it without permission when the account conditions allow.

To allow you to ensure the money is used as you intend, keeping separate accounts in your own name may be the best thing for you (and would avoid you needing to go via your parents or your brother/sister.)

For reference, here is the MSE guide on children's savings accounts: https://www.moneysavingexpert.com/savings/child-savings-tax-free

xylophone · 10 January 2018 at 12:21AM

Iff the savings are in the child's own name with you or any body else as bare trustee, the child has the absolute legal right to access and control at the age of 18 (16 in Scotland).

Yo may prefer to regard your own ISA as "earmarked" for savings that you plan to give to your niece and nephew at the appropriate time.

Your will should reflect your desire to make these gifts ( in the unfortunate case that you should pass on before the children reach the age you consider appropriate).

Brain1600e · 16 January 2018 at 12:26PM

Hi, I have a similar issue in relation to Savings on behalf of my nephew to whom I am Trustee. My sister passed away recently and my nephew is the sole surviving heir to her estate which includes a substantial amount of cash. The terms of my sister's Will appoint me as Trustee and the assets from the estate are to be held in trust until my nephew reaches the age of 30. He is currently 25 years of age and a full time student. I want to know the best savings account for the cash as I don't want the money mixed up with my own for tax purposes, but at the same time I want to obtain the best return using my nephews own tax status.

soulsaver · 16 January 2018 at 1:05PM

Someone took the P out of your nephew...

xylophone · 16 January 2018 at 2:13PM

Hi, I have a similar issue in relation to Savings on behalf of my nephew to whom I am Trustee.

You will need to have regard to the precise terms of your late sister's will- if you are not sure of how to interpret them, you will need to see a solicitor expert in wills and trusts.

You will need to know whether the assets have (or have not) "indefeasibly vested" in your nephew - is it "when he reaches 30" or "if he reaches 30"?

See below

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563

If indefeasibly vested then the assets are held in Bare Trust - your nephew is already over 25 and well past the age of majority.

If not, then the Trust is of a different type.

https://www.gov.uk/trusts-taxes/types-of-trust

https://www.gov.uk/guidance/trust-record-keeping-for-tax-purposes

You will need to know because of the tax angle.

You may also find that establishing an account in the name of a Trust can be difficult.

You might try Natwest or Metro Bank.

http://trustsdiscussionforum.co.uk/t/bank-account-for-a-trust/3865/2

Savings for nehew / niece

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