when my two children were born, my grandparents gifted them £1000 each to kickstart their savings. Originally I had them in a child’s bank account with Lloyds that I could manage through my internet banking and I added them a little money each month. At the time the interest was less than 1% so it didn’t earn much and so I looked into alternatives. I opted for a stocks and shares isa with vanguard which I opened in early 2021. I pooled both their money into an isa in my name due to concerns about them potentially having free access to a lot of money at 18 and wasting it. I add to it each month and there is now about 16k in it (8 each). Pending a house sale following the death of a family member, I will be adding 10k to this and there are 11 years to go until they reach adulthood so at the current rate of saving and assuming similar growth it could be 25-40k each by the time they are 18-20.
when the time comes to hand over the money are there any tax implications to giving them this. It’s always been their money but on paper it’s in my account and looks as though it’s mine. I am aware of inheritance tax law where if you die within seven years of making a gift it can be taxed but if that’s the only risk, I’m prepared to take that because a) I will only be in my forties at the time and therefore likely to last seven more years and b) my total estate is worth well under 300 k so I assume they would not be expected to pay.
if they were to use the money as a house deposit obviously I would be happy to sign a gifted deposit declaration etc.
is there anything else to consider? Am I better transferring to their own names and risking them blowing it the minute they are 18? I recognise having it in my name means I can’t have my own stocks and shares isa but that isn’t an issue for me as I’m not in a position to save much anyway (have a decent pension from work though- don’t worry).
thanks for any advice