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Money saved in trust for a child

(24 Posts)
IAmOwedMoney Mon 17-Feb-14 18:23:36

If an adult had money in a savings account with a child's name on the account, and the adult took money of the account where does the child stand on the matter when they become an adult?

LunchLadyWannabe Mon 17-Feb-14 18:29:46

They dont have a leg to stand on i dont think.

Its not classed as the childs money until its signed over to them .

IAmOwedMoney Mon 17-Feb-14 18:54:53

So anyone can set up an account for a child in the child's name and just take the money for themselves? shock

alwaysneedaholiday Mon 17-Feb-14 18:59:18

I believe there have been cases of parents being sued by their children for not managing their savings correctly - there could be recourse this way?

IAmOwedMoney Mon 17-Feb-14 19:07:56

It is not my money it is my child's money that was "looked" after by a run a way "Father".

So what age can a child "Sue" their parent for mismanagement of their savings? What is involved?

IAmOwedMoney Mon 17-Feb-14 19:08:39

The children's savings were documented in a court sworn Form E.

Frogbyanothername Mon 17-Feb-14 19:11:29

My DH has a similar situation with his DCs accounts and he sought legal advice.

He was told that if the adult claims the money, they are liable for tax on all the interest paid to the "child" - so maybe a call to HMRC is needed?

IAmOwedMoney Mon 17-Feb-14 19:14:38

That may be tricky as it was a Standard Life savings account that was linked with the adults savings account, interest was shared. Would the HMRC report work in this scenario?

Frogbyanothername Mon 17-Feb-14 19:17:39

You can only ask - presumably, there was a tax free element to the interest because of the DCs tax-free status?

IAmOwedMoney Mon 17-Feb-14 19:19:25

I am waiting for a complaint response from Standard Life over the matter, when I have that information then it sounds like the next step is to speak to HMRC then. What age can a child take this matter on themselves?

Frogbyanothername Mon 17-Feb-14 19:20:59

DH was told not until his DCs were 18 would the money be considered "theirs".

ButICantaloupe Mon 17-Feb-14 19:26:42

The trustee is the legal owner of the assets within the trust.

The parent is the trustee in this scenario. It is their duty to look after the asset for the benefit of the beneficiary. The trustee must act in good faith and does not have the right to benefit from any assets within the trust.

Might be worth looking into the rules of the Standard Life trust to see if this is allowed. It shouldn't be though.

LunchLadyWannabe Mon 17-Feb-14 19:30:37

*Add message | Report | Message poster IAmOwedMoney Mon 17-Feb-14 18:54:53
So anyone can set up an account for a child in the child's name and just take the money for themselves?*

Some adults put money under a childs name as a way of hiding money and because a childrens savings account pays more interest.

Someone upthread said that if the money didnt go to the child then you was taxed on the money.

This is not true! You get less interest paid on the money from then on. You do not get taxed on the whole amount thats already been built up.

ButICantaloupe Mon 17-Feb-14 19:45:53

LunchLady, that is simply not true! Where have you got that information from?

Why would the bank pay lower interest?! confused it's a HMRC issue, hence the PP referred to the parent paying tax on the money.

LunchLadyWannabe Mon 17-Feb-14 19:47:43

The bank informed me of this when i opened dds account.

It was with yorkshire building society.

superbagpuss Mon 17-Feb-14 19:52:21

my mother 'stole' my money when she left home and spent it on my step siblings

it was a few hundred

can I sue her grin.

morethanpotatoprints Mon 17-Feb-14 19:53:05

Isn't there a difference between in trust for a child until 18 and just having savings for your dc in their name?
I know my dd can use her savings whenever she wants, but her trust fund she can't touch until 18. We as parents can't touch it at all.

IAmOwedMoney Mon 17-Feb-14 19:59:54

I am more confused now than I was when I first posted this query.

Superbagpus hopefully we will find out soon.

ButICantaloupe Mon 17-Feb-14 20:32:43

The bank are incorrect. I know this as a qualified trust adviser.

If you have savings of children in a Hugh street deposit account it's effectively in a bare trust.

Viviennemary Mon 17-Feb-14 20:42:05

As far as I know the adult has the right to withdraw the money if the money is held in their name for the child. But not just any adult can open an account for any child. Banks and BS want to know the relationship with the child. So not anybody can open an account for any random child. They told me it was because of money laundering and hiding money in a child's account. I suppose they mean ill gotten gains and so on.

LunchLadyWannabe Mon 17-Feb-14 20:49:12

You can open accounts for your grandchildren and nieces and nephews etc.

You just need the childs birth certificate

caroldecker Mon 17-Feb-14 21:21:10

If a parent puts the money in the child's name, any interest over £100 a year is taxable as the parent's income.

Frogbyanothername Mon 17-Feb-14 21:28:07

I'm just passing on what my DH was told.

He and his ex are joint signatories on saving accounts in their DCs names that they both pay into. His ex has been trying to withdraw the money - she even told the bank that DH had died, not realising that he had (subsequent to their divorce) opened an account there himself - that resulted in some interesting telephone conversations!

DH was told by a solicitor that if his ex managed to transfer the money into an account in her own name, she would be liable for tax on all the interest earned from when the account was opened - and that DH would have a good case to secure a refund from the bank because they need both signatures. DH was told that once his DCs turn 18, it's their money that they can do with as they wish.

If DH has been given duff advice, then I'm sorry I misled you, OP!

IAmOwedMoney Tue 18-Feb-14 09:43:05

I am still none the wiser really.

Standard Life sold the accounts to Barclays, so I have contacted Barclays, I await a response.

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