Giving money to your children
If a parent's gift earns a child more than £100 a year, all of the income is taxed as the parent's. See whether that catches your gift, your Junior ISA room, and where it stands for inheritance tax.
Your answer
Enter how much, and the child's age, to see whose income it is for tax.
About this calculator
For parents, grandparents and others thinking about giving money to a child, who want to know who pays tax on the income and how a Junior ISA or a bare trust changes it. It covers tax only: it isn't investment advice, and it doesn't compare products.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
We work out the yearly income from the amount and the return. If a parent gives it to a child under 18 and it earns more than £100 a year outside a Junior ISA, all of it is taxed as that parent's income, at their savings rate. Otherwise it's the child's income, and their own tax-free allowances usually cover it.
A Junior ISA takes up to £9,000 a year from everyone together, and its income is tax-free. Anything over the room left, we treat as going into an account in the child's name. For inheritance tax, the first £3,000 a year from each giver is outside their estate straight away, and the rest once they've lived 7 years.
Worked example
£120 of the £480 a year this would earn counts as your income, as it's over £100: about £48 tax a year.
From a parent · into a Junior ISA · child aged 10 · 4% a year · higher rate
| The gift, from a parent | £12,000 |
|---|---|
| Into the Junior ISA (room this year £9,000) | £9,000 |
| Over the room, so into an account in their name | £3,000 |
| Yearly income at 4% | £480 |
| Of which in the Junior ISA: tax-free, not caught by the £100 rule | £360 |
| Income from this parent's gift: over £100, so all of it is taxed as the parent's | £120 |
| Tax for the parent at 40% (higher rate) | + £48 |
| Tax a year on this gift's income | £48 |
| Inheritance tax: outside the estate straight away (£3,000 a year) | £3,000 |
| Inheritance tax: outside the estate once the giver has lived 7 years | £9,000 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Does the £100 rule apply to grandparents?
No. It only applies to money from a parent or step-parent. Income from a grandparent's gift is the child's, and their own tax-free allowances usually mean there's nothing to pay.
Is it £100 of income, or tax on the part over £100?
Once a parent's gift earns the child more than £100 in a tax year, all of the income is taxed as the parent's, not just the part over £100. Each parent has their own £100, and money in a Junior ISA or Child Trust Fund doesn't count.
Does a bare trust get round the £100 rule?
Not when a parent sets it up. The income from a parent's bare trust for a child under 18 is still taxed as the parent's if it's over £100 a year. A bare trust set up by a grandparent is taxed as the child's.
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