Interest and Childrens Bank accounts

(last updated 22/04/2014)

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Interest earned on a child's savings account may in some circumstances be treated as income of the parent rather than the child. ATO guidelines are as follows:

"whose money is it?":

• If the money in the account really belongs to the parent, interest is included in the parents' tax return.
• If the money in the account is made up of money the child has received as birthday or Christmas gifts, pocket money or from odd jobs, than the money in the account will be treated as if it belongs to the child.

Note that a child can earn up to $1750 tax free. All passive income over that amount is taxed at the highest marginal rate. Wages and other "earned" income is taxed at normal rates.

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:

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For help with your eTax return see our eTax Return Checklist.

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