Year End Tax Review 2010/2011


Lead articles

Looking forward

This year, next year

Rate of change

Pension merry-go-round


Too much NIC

NIC and pensions

Company cars

Tax-free benefits

Childcare vouchers

Business - General

Time to incorporate?

Associated or not?

His and hers

Family bonus

Profit and loss

Show me the money

Can't pay, won't pay?

Turning back the clock

Business - VAT

Standard VAT or flat VAT?

VAT's up again

All Europeans now

A good start for VAT

Happy returns?


Top-up savings

Rainy day money

Capital Gains

Gains favoured

Splitting gains

A place in the country

Holiday lets reprieved


Family fortunes

Where there's a Will

Credits and debits

Benefit going

Piggy banks

Still trustworthy?


Penalty shoot-out

Going online

Paperwork, paperwork

Pay tax later

Opportunity knocks again


Give and save

Non-Domiciled People

Home and away


Interesting times

Piggy banks

If a parent gives something to a child under the age of 18, the parent remains taxable on income if it is more than £100 a year. So you cannot enjoy the benefit of the children's personal allowances by putting investments or deposits in their names.

There is no similar rule for gifts from grandparents. Of course, the Revenue might be upset if a parent gave money to a grandparent to give to a child, but a genuine and straightforward gift from a grandparent, which does not originally come from the parent, can be put into a bank account for a child and no tax needs to be paid on the interest (as long as it is less than the child's allowances).

Anyone born from September 2002 up to December 2010 is entitled to a "child trust fund" - a savings account with £250 from the Government to start with. The money cannot be touched until the child is 18 (so not before September 2020!). If you have a child who qualifies, you can add to the account (up to £1,200 a year, and the £100 'income-from-parent' rule doesn't apply) so the child will build up savings tax-free.

Children born from January 2011 onwards will not be entitled to a child trust fund. In autumn 2011 the government intends to introduce a new tax-free "junior ISA" which parents will be allowed to add to without being taxable on the income, but there will be no government contribution to these accounts.

Action Point!
What's the best way to build up savings for the children?