This is monzo remember 
itās nice to be different, and likely an easier way for them to implement the product.
I wouldnāt say itās nice to be different if it makes the product potentially worse
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It doesnāt make the product worse in any way?
I opened nationwide accounts for my children and that is done in the same way. I have to pay tax on their interest. Would be nice if theyād done this differently so we didnāt. At the moment the interest on their savings is so small the tax isnāt really an issue but it may become so in which case Iād have to keep their savings elsewhere.
Can I ask why you believe you need to pay tax on your childrenās interest?
Unless they receive more than Ā£100 in interest from money given by their parents, this shouldnāt be the case.
Like Monzo explained above for their savings accounts, the accounts arenāt really in the childrenās names, but the parents, so technically/legally, the interest is in the parents names, and so counts towards your personal allowance. Same for the Nationwide (future saver accounts I think they are).
- **The parent or guardian who opened the Under 16s account legally owns the money:**Under 16s Savings are in the parent or guardianās name. So any interest earned on Savings will normally count towards the main parent or guardianās taxable income.
I believe you are incorrect.
Other financial institutions including Nationwide treat childrenās accounts as ābare trustsā with the parent as the trustee
āBare trustā is a legal term which describes how the money in the account is owned. Although the account will be in your name, the money in the account is held by you on behalf of the child you are saving for. This means the money in the account belongs to the child and when they reach the age of 18 (or 16 if they live in Scotland), the child can request that you pay the money to them.
This means any interest earned counts against the childās personal allowance not the parents (unless the interest from capital provided by the parent is more than Ā£100).
Hence, no tax is usually due on childrenās accounts.
This is why I am asking why Monzo are doing something different..
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It does if the parents are having to pay tax (or use some of their own PSA) when that is not the case with childrens accounts at other financial institutions.
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Even the link there says:
The parent will have to pay tax on all the interest if itās above their own Personal Savings Allowance.
So the child may get Ā£100, but if youāve exceeded your Ā£1000/500/0 allowance, you pay interest on it all.
I believe you have misunderstood the tax rules.
Children are entitled to their own Ā£12,570 personal tax allowance each year and would not pay tax on interest under this amount.
The reason for the Ā£100 rule is as an anti-avoidance measure to prevent a childās personal allowance being used by parents of children aged under 18 to avoid tax.
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I took it as savings allowances not working tax allowances, my bad.
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According to this page:
Which covers bare trusts which is how Nationwide say their future saver is set up, the trustee (i.e.. parent) not the beneficiary (the child) is responsible for paying income tax on the trust income:
āThe trustees pay Income Tax on the trust income by filling out a Trust and Estate Tax Return.ā
Which aligns which a letter I received from Nationwide when I opened the accounts.
But does that actually mean that the trustee pays the income tax but the income tax is calculated against the childās income?
This probably isnāt the right place for it here but if that is the case then Iāll leave their savings in Nationwide rather than moving some/all to Monzo.
As previously stated above, the interest is the childs. You donāt need to pay tax on it as a parent unless the Ā£100 rule applies.
That is why every child account that I can think of (apart from Monzo) is structured as a bare trust.
Some articles you may find useful:
Point 5 on https://www.moneysavingexpert.com/savings/child-savings-tax-free/#teaching
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Even Revolutās new partnership with Clearbank for their new Teen and Kid savings accounts have done it right
Teens (16 - 17): Interest goes towards their own allowance
Children (a under 16): Bare Trust as mentioned above
Why are Monzo so behind here and unable to keep up and do the right thing, as others have said plenty of other high street banks who do the above also
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as someone who has an under 16 account for my child but keeps the majority of his money in my own savings pot this is defiently making the product better for me. This allows him to see and access his own savings.
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Thank you to Monzo staff for unflagging after being falsley flagged by the community Iām guessing because of my mention of a competitor
I think itās the AI bot or some petty 
again.
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@AlanDoe the new system being too touchy 
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Still making sure itās working to the best of itās ability 
Thanks for the heads up
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