interestt payable?

[chrissyannie]

when our kids were left money to them,we were advised to invest it in our names,as doing it any other way would have been expensive(they were quite young) We invested it in guaranteed equity bonds which have now matured,giving them �1400 interest.,we put it back into bonds for another 5 years(in their own names now!),but dont know if we are liable to pay tax on their interest,and if so -do we have to inform the tax office,or will they know? Hope someone has an answer.

[factor-fiction]

You are liable for interest earned when the bonds were in your names. I'm not sure why you were advised to put it in your names rather than the kids' names.

Now the money is in their names interest can be paid gross but there can be a tax liability on money given by parents when interest exceeds �100 a year.
http://www.hmrc.gov.uk/incometax/tax-free-inte rest.htm
It will depend on whether the HMRC regards it as money you gave the children or money left by someone else.

[chrissyannie]

thanks for that.The reason we put it in our names was because had we put it into a trust fund for them we were told it would work out expensive.

[dzug]

It's possible that tax has already been deducted from the interest.

You were given duff advice originally.

[chrissyannie]

we know the interest has'nt been deducted yet,just wondered if we had to approach the Inland Revenue,or if they would simply "bill" us.
Was'nt really duff advice,as it costs a lot of money to set up and keep 2 separate trust funds going for 10-12 yearsIt was our bank that told us to put it in our names(but there again!!!!).Mind you,if they have to pay a lot of interest it would have prob been just as cheap a way of doing it!