Income tax

It is important to remember that if the person that you are responsible for has money held by the Court Funds Office, they may be liable for Income Tax. Income tax is payable where a person's gross income exceeds their annual personal allowance, and it makes no difference whether that person is a child or an unemployed adult. Interest on the Special Account is paid gross, with no tax deducted, which means that if the interest received in any one income tax year exceeds the client's personal allowance, income tax will be due and a tax return will need to be completed.

If monies are invested in securities, any dividends will be paid with a 10% tax credit. This means in most cases there will be no further tax payable. However, if the client's income is particularly high they may have to pay a higher rate of tax. In such cases additional tax may be payable on any dividends or interest received. If security holdings are sold, either whilst the fund is in court or when it is closed, the client or beneficiaries may be liable to Capital Gains Tax, if the gain exceeds the annual capital gains allowance. If you do not know the amount of such personal tax allowances, you should consult your local HM Revenue and Customs office for more information.

Please be aware that whilst are Customer Services Helpline advisors will be happy to assist with any queries, they are not qualified to offer any financial advice.