kids investments !?

[rootsnall]

Just to hijack this thread a little, my son gets about £250 a month through his disability living allowence. He tends to use this to buy the specialist things he needs. What options are there for getting part of this invested so that it earns him more money rather than earing next to nothing in his savings account. I was hoping that he could easily put aside £150 a month which could generate a reasonable amount of cash over say the next 8 years.

What sort of things can he put his cash into bearing in mind that he's only 11?

Have a look at the best buy tables for savings accounts, 6.? percent interest tax free will be hard to beat without taking risks. If you fancy a bit of risk then my folks buy shares for my kids via Hargreaves Lansdown ( www.h-l.co.uk ) so give then a ring.

[BoredBloke]

Just to hijack this thread a little, my son gets about £250 a month through his disability living allowence. He tends to use this to buy the specialist things he needs. What options are there for getting part of this invested so that it earns him more money rather than earing next to nothing in his savings account. I was hoping that he could easily put aside £150 a month which could generate a reasonable amount of cash over say the next 8 years.

What sort of things can he put his cash into bearing in mind that he's only 11?

[rootsnall]

Can you still make a deed of variation? Anyway, to the question:

Kids get their own tax allowance

If income in excess of £100 is generated as a result of income from parents (it's per person per kid) then the entire amount is taxed to the parent. I don't beleive it will become a parental gift if the money comes through a result of a deed of variation but best to check.

It is only possible to reclaim REAL tax paid. Thus if they have a share portfolio generating say 5k per annum then none of the "tax credit" is reclaimable (same as for an adult). A decent case for keeping a reasonable sum in cash can be made.

Consider whether you should be creating a family trust. If the kids are < 18 then at age of 18 they will become absolute owners of the asset. They can then spend it on drugs, beer and women - and waste the rest. You can get round this with proper trust planning, question is the tax treatment as money goes into the trust.

ISA's etc are not available to kids.

The kids will probably need to be filling in tax returns. Mine get away with the "simple" 4 page job.

Keep scrupulous records of where the funds came from and avoid mixing what investments are purchased with what. (e.g. I have 2 accounts for each of my kids with thier brokers, one for monet from grandparents, one for money from me).

Ta for that. Roughly as I thought, so no need for a trust and I'll just have to do a tax return on their behalf. At 15K a piece then it's up to them if they want to squander it at 18, if it was a lot more then I'd think again. They already have bare trusts for money from grandparents ( I didn't do the admin ) and I'll avoid mixing the two.

[ASB]

My Grandfather is not still living and we are going to do a deed of variation to direct some money to my kids from the will. Pretty sure I know the score but just double checking. I seem to remember some detailed debate on something similar a while back.

Can you still make a deed of variation? Anyway, to the question:

Kids get their own tax allowance

If income in excess of £100 is generated as a result of income from parents (it's per person per kid) then the entire amount is taxed to the parent. I don't beleive it will become a parental gift if the money comes through a result of a deed of variation but best to check.

It is only possible to reclaim REAL tax paid. Thus if they have a share portfolio generating say 5k per annum then none of the "tax credit" is reclaimable (same as for an adult). A decent case for keeping a reasonable sum in cash can be made.

Consider whether you should be creating a family trust. If the kids are < 18 then at age of 18 they will become absolute owners of the asset. They can then spend it on drugs, beer and women - and waste the rest. You can get round this with proper trust planning, question is the tax treatment as money goes into the trust.

ISA's etc are not available to kids.

The kids will probably need to be filling in tax returns. Mine get away with the "simple" 4 page job.

Keep scrupulous records of where the funds came from and avoid mixing what investments are purchased with what. (e.g. I have 2 accounts for each of my kids with thier brokers, one for monet from grandparents, one for money from me).

[rootsnall]

Can't you ask your accountant for advice? This is the sort of tax planning that an accountant should be able to help with.

HTH

My faith in non specialist accountants and solicitors isn't high ! Most struggle to get the basics correct so I reckon it's always best to check it yourself.

[DimPrawn]

My Grandfather is not still living and we are going to do a deed of variation to direct some money to my kids from the will. Pretty sure I know the score but just double checking. I seem to remember some detailed debate on something similar a while back.

Can't you ask your accountant for advice? This is the sort of tax planning that an accountant should be able to help with.

HTH

[rootsnall]

My Grandfather is not still living and we are going to do a deed of variation to direct some money to my kids from the will. Pretty sure I know the score but just double checking. I seem to remember some detailed debate on something similar a while back.

[scooterscot]

WHS - every year a tax free gift can be made. Planning is the key.

http://www.direct.gov.uk/en/MoneyTax...ts/DG_10010612

[moorfield]

It looks like my 2 kids might get left some money via my grandfathers will. Am I correct that if the money goes to direct to them from the will then they will be taxed as indivduals with their own tax thresholds. ie. it won't be deeemd to be part of my income.

Yes I think children have the personal allowance like everyone else, but no idea how inheritance works for them. If the grandfather is still living (?) he could consider contributing now to CTF, pension etc. rather than leaving it all until the will.

[rootsnall]

It looks like my 2 kids might get left some money via my grandfathers will. Am I correct that if the money goes to direct to them from the will then they will be taxed as indivduals with their own tax thresholds. ie. it won't be deeemd to be part of my income.