| |
Major Site Upgrade in Progress |
|
billandhelen
Stranger
Joined: 18 Feb 2006
Posts: 2
Cash Points ££ 15.00
|
|
|
 |
|
 |
|
 Posted: Sat Feb 18, 2006 12:51 pm Post subject: Investing for children |
 |
|
|
 |
|
 |
|
|
|
|
 Hi everyone - new boy here...
I stumbled across this forum when searching for advice on how to invest for my kids. I would be grateful for some impartial opinions..
My kids are 14 and 13 and I want to start saving for them to each put down a deposit on a house when they are over 21.
I want to give away £5000 each per year.
Am I (or they) liable to pay tax if I do so?
If the kids get the lump sum when 21, will I (or they) be taxed then?
What is the best way to invest the money?
Many thanks |
|
|
|
|
|
|
 |
|
 |
|
Sarah
Money Manager
Joined: 16 Jul 2004
Posts: 831
Cash Points ££ 12024.38
|
|
|
|
|
|
|
| Posted: Sat Feb 18, 2006 3:32 pm Post subject: Re: Investing for children |
|
|
|
|
|
|
|
|
|
|
| billandhelen wrote: | Hi everyone - new boy here...
I stumbled across this forum when searching for advice on how to invest for my kids. I would be grateful for some impartial opinions..
My kids are 14 and 13 and I want to start saving for them to each put down a deposit on a house when they are over 21.
I want to give away £5000 each per year.
Am I (or they) liable to pay tax if I do so?
If the kids get the lump sum when 21, will I (or they) be taxed then?
What is the best way to invest the money?
Many thanks |
Hi billandhelen
The inland revenue rules are that the maximum A parent can earn in interest from money invested in a childs name is £100 per year, which roughly equates to £2000 at an interest rate of 5%
So the maxium that both of you could invest would be £4000 in each childs name.
£100 rule
There are special rules if a parent has given the savings to their child. If gifts from a parent produce more than £100 gross income a year, the whole of the income from the gifts is normally taxed as that parent’s income. A child cannot get back any tax on that income. Nor can interest paying accounts have interest paid without tax taken off.
The £100 rule continues to apply to young people until they reach 18 or marry. They cannot normally complete form R85 to get interest without tax taken off if it includes gifts from a parent which, alone or when added to other gifts from the same parent, will produce more than £100 gross income a year.
The £100 rule applies separately to each parent.
You could however invest in their name into a capital gains product such as the stock market related fund or bond for the long-term, that does not pay interest or income. |
|
|
|
|
|
|
|
Guest
Cash Points ££ 15.00
|
|
|
|
|
|
|
| Posted: Sat Feb 18, 2006 4:24 pm Post subject: |
|
|
|
|
|
|
|
|
|
|
Take a look at the unit trust and investment trust boards  |
|
|
|
|
|
|
|
Deborah
Veteran Investor
Joined: 12 Jul 2004
Posts: 418
Cash Points ££ 1730.36
|
|
|
|
|
|
|
| Posted: Sat Feb 18, 2006 7:01 pm Post subject: |
|
|
|
|
|
|
|
|
|
|
Offcourse if your a basic rate tax payer, then you don't need to worry about the tax position since the tax would be deducted at source.
Though if your a higher rate taxpayer than extra tax would be due at 20% ! as per your Self Assessment return.
Alternatively if you and your partner do not use your Cash ISA allowances then you could put £3k each into those every year, and those are entirely tax free
One of the best paying at the moment is the halifax fixed cash isa at 5% |
|
|
|
|
|
|
|
claire
Guest
Cash Points ££ 15.00
|
|
|
|
|
|
|
| Posted: Sat Feb 18, 2006 7:07 pm Post subject: |
|
|
|
|
|
|
|
|
|
|
Cash ISA's run until 2010, so you have 4 tax years left or could put away £28k.
Though likely somethign else will replace them in 2010. |
|
|
|
|
|
|
|
billandhelen
Stranger
Joined: 18 Feb 2006
Posts: 2
Cash Points ££ 15.00
|
|
|
|
|
|
|
| Posted: Sun Feb 19, 2006 9:49 am Post subject: |
|
|
|
|
|
|
|
|
|
|
| Thanks for the replies everyone. |
|
|
|
|
|
|
|
fireboy
Saving Enthusiast
Joined: 18 Oct 2004
Posts: 134
Cash Points ££ 459.94
|
|
|
|
|
|
|
| Posted: Sun Feb 19, 2006 9:27 pm Post subject: |
|
|
|
|
|
|
|
|
|
|
| Your taxed in the year you cash in your capital gains, so if you invest for 9 years and the gains are greater than your capital gains allowance in that year then you will be taxed. |
|
|
|
|
|
|
 |
Online Finance Tools & Calculators |
 |
| Credit Score Calculator |
Easy to use online Credit Scoring tool - Calculate your credit score now online for FREE ! using the Moneyforums.co.uk credit scoring tool. Also TEN Tips on improving and mainting a good credit rating ! |
|
| Quick Health Calculator |
Easy to use quick health calculator to help you get started on the path to fitness. Calculates your body mass index (BMI). |
|
| "When will I die ?" Calculator |
Calculate when will you die based on your current life style and then more importantly what you can do about extending your lifespan ! |
|
| Mortgage Calculator |
Easy to use online Mortgage calculator tool - Calculate how long it will take to pay off your mortgage and what your monthly repayments will be as well as interest charged per month per each year. |
|
| Savings Calculator |
Use the flexible savings calculator to estimate the amount of interest you would earn given a level of monthly savings, with many optional settings. |
|
| UK Tax Calculator |
Check your tax and NI liability using this easy to use online tool. Outputs, Tax, Ni, Net pay and gross pay on an annual, monthly and weekly basis, also estimates your tax burden and the number of days a year you work for the tax man ! Plus lots of tax saving tips. |
|
|
 |
|
 |
|
Money
Forums Guides |
|
| Credit
Card Stoozing |
The
following guide explains the basics of credit
card stoozing in a step by step basis. |
|
| Discount
Vouchers |
Online
discount vouchers giving upto
50% off in stores such as Dixons,
Tesco, Avon, Currys, Boden and more. Many
of the vouchers are time limited - So check
back regularly |
|
| Money
Saving Guide |
Guide
to saving money on household bills & personal
finances - Start saving thousands of £'s
every year TODAY ! |
|
| Savings
Tree |
A
guide to Savings Accounts, from Cash ISA's to
Regular Savers to Premium Bonds, all explained
in an easy to understand manner. |
|
|
Users
Groups | Profile
| Messages
| FAQ | Sponsers
& Links | Member
list | Recommend this site | Top Money Saving Sitee
© 2004 - 2007 Moneyforums.co.uk / Market Oracle Ltd - Asserts copyright on all topics & posts made on this site. Moneyforums are open forums, and thus posts are NOT endorsed by Moneyforums.co.uk / Market Oracle Ltd . Any and all information provided within the Website is for general information purposes only and nor is or shall be deemed to constitute, financial or other advice. We recommend that independent professional advice is obtained before you purchase any product and/or service. All tools and guides are provided as is for general information purposes only.
|
 |
Website Designed and Mantained by Walsoft.net |
 |
| |
