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Childrens Investments - Tax Guides

Children have their own personal tax allowance so any income within the limit is tax-free.

To prevent tax being deducted from the interest on your child's bank or building society account - make sure you complete the Inland Revenue form IR85. This form will register your child as a non-tax payer until they turn 16 when they need to re-register personally.

Friendly Societies offer savings plans with special tax privileges. They offer ISAs, investment bonds and unit trusts as well as tax-exempt investment products. The funds have special tax treatment, similar to pension funds. They are exempt from income and capital gains tax however this does mean that contribution levels are limited to £25 per month per person (you can also save on behalf of your children). Minimum contributions vary but can be as little as £10 - £15 per month.

 

Share dividends are paid to investors net of a tax credit, this currently stands at 10%. These dividends include income paid by the majority of unit and investment trusts. Taxpayers at the basic and lower rate will have no further tax to pay and although children are not normally taxpayers, they cannot reclaim this tax. It is therefore more tax efficient to choose shares or trusts that are more capital growth based, as they tend to be tax-free.

If you would like to talk to someone to make sure you are taking every opportunity to reduce your tax bill, complete our Quick Enquiry Form and we will arrange for an expert to contact you.

www.Investments.co.uk has information on everything you need to know about making the most of your money. You can also visit us at Link: www.insurances.co.uk to get the best deals on your car insurance.

 

UK Investments - Financial, Property & Other Investments - 1998-2008

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