Interest on children’s savings

Source: HM Revenue & Customs | | 05/11/2019

All children in the UK have their own personal annual tax allowance. However, anti-avoidance laws prevent this allowance being utilised by parents of children aged under 18 with some minimal exceptions.

If older children are employed by a parent they can receive income paid as wages subject to the usual rules.

There are special rules if a parent gifts significant amounts of money to their children which results in annual bank interest of more than £100 (before tax) accruing to each child. If this is the case, the parent is liable to pay tax on all the interest if it’s above their own Personal Savings Allowance.

The £100 limit does not apply to money given by grandparents, relatives or friends. In addition, any income from CTF’s or Junior ISA’s is exempt from Income Tax and CGT on the child or the parent even where the invested funds came from the child’s parents. The 2019-20 subscription limit for both CTFs and Junior ISAs is £4,368.



 

Latest News

Updated HM Treasury instructions re: CJRS
30/06/2020 - More...
On 26 June 2020, the Chancellor, Rishi Sunak made a further (third) Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 concerning the Coronavirus Job Retention

Government support for pubs, cafes and restaurants
30/06/2020 - More...
The government has confirmed a further easing of lockdown as pubs, cafes, restaurants, hotels, hairdressers and cinemas have been given permission to reopen in England from 4 July.

Financial help for debt advisers
30/06/2020 - More...
The government has announced that an extra £37.8 million will be made available to support debt advice providers during 2020-21. The distribution of the money will be

Search


Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login