ChatterBank0 min ago
Tax On Interest In Bank Accounts
18 Answers
hi, my daughter has a bank account with 1k in it (lucky her--she's richer than me!)
i notice from her statement she paid tax on her interest this year (around £2)
do i have to fill in some sort of form,to say she doesn't earn enough to pay interest or is this right?
i notice from her statement she paid tax on her interest this year (around £2)
do i have to fill in some sort of form,to say she doesn't earn enough to pay interest or is this right?
Answers
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For more on marking an answer as the "Best Answer", please visit our FAQ.>well that's crap - any money i give her has already been taxed.
The same point applies to all bank interest (other than interest in tax free accounts,mainly ISAs).
Even at a very generous 3% a year your daughter would need to have over £3000 given by you in her account before the interest reaches £100 a year. As others have said there is no tax where the money is given by others. In practice I doubt HMRC ever bother except in cases where parents are sheltering tens of thousands of pounds in the child's name
The same point applies to all bank interest (other than interest in tax free accounts,mainly ISAs).
Even at a very generous 3% a year your daughter would need to have over £3000 given by you in her account before the interest reaches £100 a year. As others have said there is no tax where the money is given by others. In practice I doubt HMRC ever bother except in cases where parents are sheltering tens of thousands of pounds in the child's name
The interest will exceed £100 a year after around 3 years so in theory you will be liable for tax, just as if it was your money. If the child is under a certain age and you have control of the account then it is regarded as your money since in theory you can withdraw it and use it for yourself. I'm not saying I agree with taxing savings income - I'm just setting out the taxarrangements