Bank and building society interest - Example 7

Mrs Chan opened an account for her son Charlie when he was young and, because she didn’t want him to be able to withdraw the savings, she opened the account with herself as trustee. The account was in the name ‘Mrs Chan re Charlie Chan’.

When Charlie turned 16 the bank wrote to say they were cancelling the R85 – they cancel all R85s when a child turns 16. Because Charlie was still at school and had no income apart from the £100 a year interest he received, he opened an account in his own name and completed a new form R85.

Mrs Holmes opened an account for her son Sherlock when he was young and, because she didn’t want him to be able to withdraw the savings, she opened the account with herself as trustee.

The account was in the name ‘Mrs Holmes re Sherlock Holmes’. When Sherlock turned 16 the bank wrote to say they were cancelling the R85. But Mrs Holmes didn’t want Sherlock to hold the money in his own name until he was 18 so she left the account as it was – with herself as trustee. A form R85 cannot be signed for this account and the interest is now paid with tax taken off.