Monday, 24 August 2009

Tax planning for kids


It appears that my prediction of a baby boom is certainly happening.


So I thought I will outline some old and new tax incentives.

So here we go:


1. £190 Tax Free Grant For Mums To Be
From April 2009 mothers-to-be can now claim a tax- free cash sum of £190 in the form of the new Health in Pregnancy Grant (HiPG).

This £190 is a one-off payment, and although not a massive amount, it will buy a few SMAs and Nappies.

2. Child Benefit
An old incentive, but are you maximising the potential of this benefit?
The trick is to make sure this money goes straight into the child's account or set up a DD and let the power of compound interest do the rest.

3. Child Tax Credits
Some parents are aware of this but few actually claim it.




4. Childcare Vouchers
If you run your own business, do make the most of this £55 per week per parent tax free allowance.


For a husband and wife business, that's about £5k a year tax free income to go towards childcare.

5. Tax free income from grandparents
We all know how grandparents adore their little ones. Good news is any income from grandparents to grandchildren are tax free.



6. Friendly Societies
You may not have heard of this and the taxman may not want you know, but they do offer some great tax free savings plan for children.


Do a google search on them and decide for your self.

7. The Use Of Trusts
Please do not believe in all the hype that trusts are dead in waters.

Trusts still provide useful and powerful tax planning tools for children.

8. Child Trust Fund Vouchers
You should receive an initial amount of £250 to open an account for the child.


When you receive the booklet that comes with the voucher, look out for friendly society providers.

9. Maternity Allowance
Make sure you qualify for the maximum allowance.


If you currently do not pay yourself wages from your business, you may have to start paying something now to avoid missing out.





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