Saving Accounts for Children - Non Domiciles

[Planet Claire]

My mother has two accounts in her own name where she deposits money for her two grandchildren. Both children were born and live in China, although they are registered as being British born abroad.

Does anyone know of any accounts she can set up in the children's names?

Thanks.

[Planet Claire]

Posting this between Christmas and New Year perhaps wasn't the ideal time to elicit responses. So now that everyone is back at work and reading PH can anyone help?

Thanks

[Eric Mc]

Are the accounts in your mother's name or the names of the children?

[Hyper10]

Planet Claire said:

My mother has two accounts in her own name where she deposits money for her two grandchildren. Both children were born and live in China, although they are registered as being British born abroad.

Does anyone know of any accounts she can set up in the children's names?

Thanks.

Maybe the Domicile issue is a red herring, the only thing the The Non Dom rule gets is the unremitted funds are not subject to UK tax if you live in Uk for more than 7 years. A flat 50K charge is applied for this privilege.

Surely the grandchildren if they are only kids are not taxpayers so unless Gran is very generous the question is can they open a savings account and I know Barclay's offshore will open accounts subject to usual checks but they do charge an annual fee (iirc)

[Cheib]

Sounds daft but you could start a SIPP for them it gets grossed up at the basic rate of income tax....I think it's up to about £4k you can do per annum. By the time your kids are starting work the current 40 or 50 somethings will be hitting retirement with very poor pension provisions and a state pension worth much less in real terms than it is today. Pensions will be a huge issue.

The compunding effect means that starting saving for them now will take a huge onus off them in their 20's.....

Not sure if you can for non-dom kids though!

[Planet Claire]

Eric Mc said:

Are the accounts in your mother's name or the names of the children?

The accounts that my mum has opened are in her name. I think when she has enquired about opening accounts in the grandchildren's names they [the banks] want to know the kids' address and as soon as they hear they are outside the UK they say "No".

All she wants to be able to do is go to a bank and just pay in money/cheques for birthdays/Christmas etc. from herself and other family members. Therefore the money in the account isn't all her donations, for example some of the money is from myself in lieu of presents, and should anything happen to my mum these accounts are in her name, so I guess legally it is her money.

Hyper10 said:

Surely the grandchildren if they are only kids are not taxpayers so unless Gran is very generous the question is can they open a savings account and I know Barclay's offshore will open accounts subject to usual checks but they do charge an annual fee (iirc)

Yes, both children are under 2, and as mentioned above, payments will be primarily for birthdays and Christmas from various family members, so not huge amounts at all. Not sure an offshort account will be suitable, looking at the minimum deposits required.

Cheib said:

Sounds daft but you could start a SIPP for them it gets grossed up at the basic rate of income tax…

Not sure if you can for non-dom kids though!

Funnily enough I mentioned this to my mum after hearing the suggestion on Radio4's Money Box programme about savings accounts for children, however I don't think she was too keen as she didn't want to make regular payments. Good suggeston thought!

[Cheib]

Planet Claire said:

Cheib said:

Sounds daft but you could start a SIPP for them it gets grossed up at the basic rate of income tax…

Not sure if you can for non-dom kids though!

Funnily enough I mentioned this to my mum after hearing the suggestion on Radio4's Money Box programme about savings accounts for children, however I don't think she was too keen as she didn't want to make regular payments. Good suggeston thought!

No need to make regular payments....I put money in my kids at the end of the tax year depending on how flush I am feeling. The nice is you can then be very conservative with the investment you make as you are making it over such a long time scale you do not need to be greedy and can thus be more certain of the returns. It's much better than a Child Trust Fund in my opinion and certainly lower fees.

[Planet Claire]

Cheib said:

No need to make regular payments....I put money in my kids at the end of the tax year depending on how flush I am feeling. The nice is you can then be very conservative with the investment you make as you are making it over such a long time scale you do not need to be greedy and can thus be more certain of the returns. It's much better than a Child Trust Fund in my opinion and certainly lower fees.

OK, I might re-approach this with mum then, and possibly my brother who is the father of the kids (whether they would want to access the money). Would also need to find out if this can be done for children living outside the UK.

[Cheib]

Planet Claire said:

Cheib said:

No need to make regular payments....I put money in my kids at the end of the tax year depending on how flush I am feeling. The nice is you can then be very conservative with the investment you make as you are making it over such a long time scale you do not need to be greedy and can thus be more certain of the returns. It's much better than a Child Trust Fund in my opinion and certainly lower fees.

OK, I might re-approach this with mum then, and possibly my brother who is the father of the kids (whether they would want to access the money). Would also need to find out if this can be done for children living outside the UK.

It suspect it has more to do with where the parents live. Now I think about it the pensions are set up in the children's names but they are linked to my wife as the parent rather than me....I remember we chose my wife as she doesn't "work" and is a basic rate tax payer and for some reason that is relevant!

[Planet Claire]

Cheib said:

It suspect it has more to do with where the parents live. Now I think about it the pensions are set up in the children's names but they are linked to my wife as the parent rather than me....I remember we chose my wife as she doesn't "work" and is a basic rate tax payer and for some reason that is relevant!

Parents and children all live outside the UK. It is only the father (my brother) who is a UK citizen, the mother is Chinese.