What are the tax rules on childrens pensions?
Even though children don’t pay tax, they can still benefit from tax relief on a children’s pension i.e. basic rate for every £80 contributed to a pension plan, the taxman tops it up with £20. (Up to a maximum investment of £3,600 gross per tax year) Income tax and capital gains tax does not apply to children’s pensions, however when your child takes their pension, income tax will have to be paid.
