Kids Accounts Tax Free

[rootsnall]

Err no. Unfortunately not.

If the source of the money is NOT the parents then what you say is true. If the source of the money is the parents then any income over 100 quid (I think) per child per parent generated from parental gift is taxed to the parents. It's another use of S660.

I answered without connecting the brain, I did sort of know about the 100 quid thing, my kids bank account money is via the grandparents.

[ASB]

It might eradicate the particular one of "I'll just stuff 50k for each of the kids in a build society"

http://www.hmrc.gov.uk/practitioners/guide_sba.pdf

"There is a £100 de minimis limit in section 660B(5) which means that so long as the income arising from all the settlements of one parent does not exceed £100 in any tax year, the legislation does not apply in that year. Once the £100 is exceeded all income, not just the excess over £100, is taxable as the income of the parents."

This does mean you can get away with each parent giving each child a couple of grand.

Depending on the sums involed different things may suit, fool.co.uk might be a good place to ask. Some possibilities might include bonds where income is rolled up. Tax free national savings products which may be tax free, national savings products which pay all the income in one go at the end of term. Certain types of capital bonds.

[portseven]

Err no. Unfortunately not.

If the source of the money is NOT the parents then what you say is true. If the source of the money is the parents then any income over 100 quid (I think) per child per parent generated from parental gift is taxed to the parents. It's another use of S660.

There goes that Tax free savings option....

[ASB]

They have their own tax free allowance, £5225 for the tax year 2007-2008, so they shouldn't pay any tax unless you are giving them plenty.

Err no. Unfortunately not.

If the source of the money is NOT the parents then what you say is true. If the source of the money is the parents then any income over 100 quid (I think) per child per parent generated from parental gift is taxed to the parents. It's another use of S660.

[thunderlizard]

True.
Miraculous though it is after 10 years of New Labour, there is still no tax on kids' pocket money.

[rootsnall]

They have their own tax free allowance, £5225 for the tax year 2007-2008, so they shouldn't pay any tax unless you are giving them plenty.

[portseven]

I hear a rumor that if I gave my under 16 age kids money for their bank account, they don't have to pay tax on it.

True?