Muras Matters: Is a Child’s Income Taxable As a Parent’s Income?

Background

Parents often provide a child with income from their own assets and in many cases this is done through a settlement or a trust. The income may also be provided by putting shares or other investment vehicles into the child’s name. In such cases consideration needs to be given as to whom the income may be taxable on and whether a child’s income may actually be treated as income of the parents for tax purposes.

Detail

Income paid to a minor child or for the benefit of a minor child where the income arises from capital provided by a parent is treated as parents’ income if it exceeds £100 per tax year. With current interest rates the capital made available to a minor child would not need to very significant to breach this limit.

If you have any questions on the potential taxing of income provided for a child or would like further information on trusts please contact our Tax Director, Jenny Marks.

To see our other news items please visit our Muras Baker Jones – Blog.