Tax on child account who is now 18+

Hi Admin, I have opened a saving and current account for my child when he was 15. I was paying any taxes if the interest income was more than £100. He will be 18 next month. Do I need to pay taxes on interest his account earns once he is 18+? Thanks.

Hi Amit Kumar,

You would not be required to pay tax on the interest once he is 18.

Thank you.

Hi - I have now transferred 100K to my son's account in India which will generate 7% interest. I understand that there will not be any inheritance tax implication to my son if I lived for 7 years from the date of transfer. Please correct me if I am wrong here. Also the interest income it will generate, if its less than £12k, I understand that there will not be any tax as its covered by annual allowance but does he needs to report the income just because its earned abroad? Thanks,

Hi,

You are correct in that if you live for 7 tax years after gifting the money to your son, it will not be included for Inheritance Tax purposes.You can see guidance here:

How Inheritance Tax works: thresholds, rules and allowances 

Any interest that the gift generates after it is gifted, is income of your son, who would be taxable on it, in the country that your son is resident in.

Thank you.

Hi - Thanks for your reply. Is there be any tax reporting requirement for the financial year if the only income is from Interest and its coming in the range of £7k? Thanks, 

Name removed admin .

Hi Amit Kumar,
As the interest is below £10k this is not criteria to submit a Self Assessment.
You can check the criteria here:
Check if you need to send a Self Assessment tax return
Thank you.