I would like to open a savings account in the name of my kid (1 yr. old).
It will be a non-RESP, i.e., regular savings account.

Either myself or my wife will be the primary account holder.

What are the tax implications, if any, for the child i.e. will I have to file a tax return in his name?

Also, what happens to the account in the event of the demise of the primary account holder when the child is still minor?

Thanks for any information.

Come on, folks - this can be such a hard question that no one knows.
Someone must have opened a savings account for their kids.
All I want to know is whether I have to file a tax return or not.

Hi
This question is not as simple as it seems. The interest earned on the minor's account is attributed back to the parent's income. If this amount is neglible there may not be any tax implications. However if the interest earned is a large amount there will be tax implications for you. 'Income splitting' for the purpose of reducing taxes is frowned upon by CCRA.

As for the latter part of your question....it is a good idea for all adults to have a Will and a Power of Attorney for financial purposes, in case of any unfortunate event.

I am just a layperson and have answered your questions to the best of my knowledge. Hope it helps.

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goldie

Thanks, goldie, for the reply.
Much appreciated.

I am not really looking to split income.
As I mentioned, either I or my wife will be the primary account holder anyways.
The interest earned would be reported on our tax returns anyway.
My question is - since a minor is also a joint account holder, would I need to file a tax return for him/her?

Also, what's the easiest way to have a will done?
Do I need a lawyer/notary, or can I do it myself at a post office, for instance.

Thanks.

Quote:

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Originally posted by goldie
This question is not as simple as it seems. The interest earned on the minor's account is attributed back to the parent's income. If this amount is neglible there may not be any tax implications. However if the interest earned is a large amount there will be tax implications for you. 'Income splitting' for the purpose of reducing taxes is frowned upon by CCRA.

As for the latter part of your question....it is a good idea for all adults to have a Will and a Power of Attorney for financial purposes, in case of any unfortunate event.

I am just a layperson and have answered your questions to the best of my knowledge. Hope it helps.

---

Hi
As you are showing the interest on your/spouse's income tax return, you don't have to file a return for your child. The same amount can not be taxed twice.

As for making a Will the best way is to approach a lawyer who specialises in Wills. Otherwise there are many kits which can be downloaded from the internet.....pick one that is for Ontario, as inheritance laws are different in each Province. For that matter even a Will written by you at home and signed by witnesses will do. But I still say that one should consult a lawyer who is well versed in all the ramifications of will-making.

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goldie