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£100 Child Interest Taxed as Parents for 16 year Old
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£100 Child Interest Taxed as Parents for 16 year Old
At what age does the rule regarding investment income greater than £100 for a "child" being taxed as if its the parents income? My 16 year old no longer qualifies for child allowance and can open a cash ISA but I cant see if his investment income in a long standing bare trust can now be taxed as his own rather than needing to be declared on my self assessment? Any ideas?
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- Lemon Quarter
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Re: £100 Child Interest Taxed as Parents for 16 year Old
TurboukToo2 wrote:At what age does the rule regarding investment income greater than £100 for a "child" being taxed as if its the parents income? My 16 year old no longer qualifies for child allowance and can open a cash ISA but I cant see if his investment income in a long standing bare trust can now be taxed as his own rather than needing to be declared on my self assessment? Any ideas?
As long as he is under 18 and unmarried, he is a "relevant child", and the income falls to the parents. https://www.legislation.gov.uk/ukpga/2005/5/section/629
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- Lemon Quarter
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Re: £100 Child Interest Taxed as Parents for 16 year Old
Better for the grandparents to provide the money and then the income is not taxed as the parents income.
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- Lemon Slice
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Re: £100 Child Interest Taxed as Parents for 16 year Old
scrumpyjack wrote:Better for the grandparents to provide the money and then the income is not taxed as the parents income.
Or ensure that parent sourced money is kept in separate accounts from non-parent money, or put in the child's ISA.
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- Lemon Slice
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Re: £100 Child Interest Taxed as Parents for 16 year Old
Yes my understanding is that it only gets taxed as the parents' if it was originally gifted from them.
So the suggestions to keep this separate seem helpful.
So the suggestions to keep this separate seem helpful.
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