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Death and taxes

March 29, 2008
 
What a rude awakening… Not even infants can avoid paying taxes in Finland!
 
Last year not long after my little one was born, I went and opened a bank account for her. People have been making deposits to this account, including myself and her grandparents here in Finland. She had so much money in her account at the end of last year that the bank paid interest on the sum. Then I noticed on a recent bank statement that a sum for capital gains tax had been deducted. What an outrage, she’s a baby – and she has to pay taxes!
 
I was so incensed by this that I sent feedback to the Finnish Tax Administration. (I also felt like I was opening a BIG can of worms by doing this because the Mr. said that our baby might get a tax card because "she has made some money.") The tax administration replied and they told me (via e-mail), "Bank accounts of persons are statutoried taxable. The bank withholds the 28 per cent tax and pays it to Tax Administration."
 
I was so curious as to what the situation is in Ontario that I asked my mom whether savings accounts for minors are taxed like this. (She does HR work and thus deals with money on a regular basis, so she was an obvious choice to ask.) And she said, yes, it doesn’t matter how old you are, if you make interest on a sum of money held in a bank account in Ontario, you also have to pay tax on it.
 
I know there would very big loopholes in my proposal, but I think that children under the age of 18 should not be subject to taxes on sums of money in their bank accounts…
 
One thing is for certain in life – death and taxes – even for babies… Tongue out
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