Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • IronDuke
    • By IronDuke 5th Feb 18, 3:33 PM
    • 14Posts
    • 3Thanks
    IronDuke
    Child Savings Accounts
    • #1
    • 5th Feb 18, 3:33 PM
    Child Savings Accounts 5th Feb 18 at 3:33 PM
    Hi,

    I want to open two child savings accounts for my grandchildren and if I understand it correctly because I am not the parent of the children there would be no tax payable unless interest exceeded child's tax free allowance.

    Also on my death presumably one or both parents would then take over the account and the tax situation change?

    Can anyone confirm or otherwise enlighten me please?

    Many thanks.
Page 1
    • ValiantSon
    • By ValiantSon 5th Feb 18, 5:45 PM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    • #2
    • 5th Feb 18, 5:45 PM
    • #2
    • 5th Feb 18, 5:45 PM
    Money given by a parent is subject to tax if the interest earned on it exceeds 100 in any given tax year. The same restriction does not apply to money given by a grandparent, so what you propose is fine from a tax perspective.

    There would be no change on your death as the money is the children's. The only change would occur if their parents were to fund the accounts and the interest earned on their gifts resulted in over 100 interest being paid on their deposits.

    Children have a personal allowance, just the same as adults do, so they could potentially have to pay tax if their income (all income not just from this savings account) exceeds the personal allowance (currently 11,500). I imagine that this is unlikely
    • xylophone
    • By xylophone 5th Feb 18, 7:13 PM
    • 25,574 Posts
    • 15,103 Thanks
    xylophone
    • #3
    • 5th Feb 18, 7:13 PM
    • #3
    • 5th Feb 18, 7:13 PM
    If the parents are not fully funding the children's CTF/JISA accounts, you might like to contribute to them.
    • TARDIS
    • By TARDIS 5th Feb 18, 8:21 PM
    • 111 Posts
    • 80 Thanks
    TARDIS
    • #4
    • 5th Feb 18, 8:21 PM
    • #4
    • 5th Feb 18, 8:21 PM
    Some banks allow grandparents to open childrens accounts but you'll probably need some form of id for them, eg birth certificate.

    Also, your gifts may be subject to inheritance tax if not out of spare income (in which case it's best to keep spreadsheets to prove this) and over 3k total pa. if you die within 7 years.
    • Sambella
    • By Sambella 5th Feb 18, 8:52 PM
    • 382 Posts
    • 392 Thanks
    Sambella
    • #5
    • 5th Feb 18, 8:52 PM
    • #5
    • 5th Feb 18, 8:52 PM
    I opened an account for my youngest Grandchild last Monday. Some accounts can now only be opened by a guardian or someone with parental responsibility. Junior ISA!!!8217;s especially.

    I now have savings accounts for both my grandchildren with Nationwide. The accounts are in both mine and the grandchildren!!!8217;s names and if anything happens to me it is theirs.
    • Kim_13
    • By Kim_13 5th Feb 18, 10:03 PM
    • 1,901 Posts
    • 2,035 Thanks
    Kim_13
    • #6
    • 5th Feb 18, 10:03 PM
    • #6
    • 5th Feb 18, 10:03 PM
    You may find the MSE guide to children's savings accounts of interest: https://www.moneysavingexpert.com/savings/child-savings-tax-free
    Sealed Pot 11 #520 ~ /100
    VSP 2018 #9 ~ 19.55/180.00
    CCCC 2018 #1 ~ 20.75/180.00
    • IronDuke
    • By IronDuke 5th Feb 18, 10:12 PM
    • 14 Posts
    • 3 Thanks
    IronDuke
    • #7
    • 5th Feb 18, 10:12 PM
    • #7
    • 5th Feb 18, 10:12 PM
    Thanks to everyone for your responses helpful advice indeed.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

33Posts Today

3,760Users online

Martin's Twitter