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  1. #1
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    Default Kids bank accounts - what's the go with tax?

    I want to open a high interest bank account for my daughter, with the intention being to put money in it each month to earn bonus interest, and it will eventually go towards her school fees. I'm just wondering what the tax implications of this are, I had a look at the ATO website and found it confusing. It will be in her name and spent on her education, but I'll be paying it and she won't have the choice to spend the money on anything else.
    Any advice?

    Thanks :-)

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    My bank said - until it reaches a certain amount (I think it was $10 000?) then you didn't need a tax file number on it.

    When doing a tax return you do need to declare any accounts in children's names that you have access to and use like you would your own account or savings.
    I hope that makes sense and hopefully someone can clarify with more facts :-)


    Sent from my iPhone using The Bub Hub mobile app

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    There is a lower tax free threshold for children for passive earnings, so you need to check what that is.

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    You need to claim what interest you make on it.

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    We have a term deposit for DS. He had to file a tax return and he is only 2! Juveniles can earn up to $412. DS's account made $670, so he is now a taxpayer! Crazy! We are moving the money out into an account in my name, but it really will be his.

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    We have started a small savings in our own account for bub coming in October. Only 20 a fortnight being deposited at moment but once some debt it gone will be increasing it to 80-100 a month. Don't really want to use it for school fees we will pay that when the time comes we want this savings to be for her wedding one day or towards her house deposit or similar when she is older. It's a long time away till that but we know how hard it is to get places in this world and I would love to be able to help. We will keep it a secret till she gets married one day then this will be a gift to help with a first home or similar.Will have to tell account each financial year how much interest earnt as we have to do that each year anyway on other accounts we have.

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    Subbing.....

  8. #8
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    Quote Originally Posted by clucky14 View Post
    We have started a small savings in our own account for bub coming in October. Only 20 a fortnight being deposited at moment but once some debt it gone will be increasing it to 80-100 a month. Don't really want to use it for school fees we will pay that when the time comes we want this savings to be for her wedding one day or towards her house deposit or similar when she is older. It's a long time away till that but we know how hard it is to get places in this world and I would love to be able to help. We will keep it a secret till she gets married one day then this will be a gift to help with a first home or similar.Will have to tell account each financial year how much interest earnt as we have to do that each year anyway on other accounts we have.
    This is exactly what I'm doing for my DD. I had no idea tax came into account though! Eek! I guess ill be asking my accountant about that next time. So there's a limit you need to reach before it matters though??

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    It may be an idea to see a financial planner
    Most can advise you on an education savings plan which could be a way to pay less tax.

  10. #10
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    Quote Originally Posted by April78 View Post
    My accountant has never asked how much interest our DS bank account has made. There is over $6k in there and I have never paid tax on it. This is a top accounting firm and she is a partner.
    Do they know you have it???


 

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