Inheritance Investment

Charliefiggis

Morning,

We have received inheritance from a grandparent and part of it is that 4 children have accounts set up and put into trust for when they reach 18.

We thought we had it sussed and had planned Junior cash ISA's but just found out because they all have CTF's they cant have that.

Is there any account our there that would give them a better return than 2%? The amount to invest is roughly £6,000

Any help would be really appreciated


Thanks x

dunstonh

Unit trust held under designation or using a Will trust or Bare trust is commonly used.

Indeed, it is possible that the JISA would not have complied with the Will. So, even if they were available, they MAY not have been suitable. Designation may not be suitable either but Will Trust or Bare should be depending on what it said in the Will.

Charliefiggis

Thanks for the reply, unfortunately I dont understand a word of what you have put. Never mind will have a trawl through and see what I can find

Thanks

cte1111

How about putting the £6k into their CTFs? That's what I've done with a similar amount that my children inherited from a relative. I put £3600 in each year until it was done. In the meantime I put the money into regular savings accounts with Principality and Halifax.

There was no stipulation about this money being held in trust though, this might affect your options.

dunstonh

The executor of the estate is required to know what they are doing or seek suitable advice where they do not.

Was there a Will?
Did the Will state the money was to be distributed to the grandchild?
Or is it just another beneficiary deciding to pass some to the grand child by choice?

If it was in the Will then you would typically use a Will Trust or Bare Trust. If its a choice by another beneficiary then a trust is not required (although may still be desirable). A CTF would not be suitable for inheritance money specified in the Will.

Charliefiggis

I think its that we have made the choice to put it so they cant get to it rather than a wish for it to be in trust.

The executor has just told me that we can move the dtf's from investment to savings, so will look into that because I dont want to loose any ot it which is what seems to be happening with the ctf's we have.

xylophone

You can invest in bare trust for each child - see
http://www.hmrc.gov.uk/tdsi/children.htmYou might want to look at the 10% note on the left in case it ever becomes relevant - up to date allowance figures would have to be inserted in the examples.
If the will did not specifically state that the children could have the money immediately and without condition, then it will need to be held in bare trust.

If you are not resident in Scotland (when it is 16) the child will have an absolute right to access and control at 18 - note however what must happen in regard to the R85 when the child reaches 16 .

You do not have to invest in child accounts - you can invest in any account that the provider allows to be held AB re child D or AB Trustee of child D.

You might choose a fixed rate BS bond for example.

However, remember the inflation risk with cash savings - you might consider an investment trust or OEIC held in bare trust example here http://www.sit.co.uk/products/investing_for_children/features/questions_and_answers/

Remember that if you choose a fund that pays interest tax can be reclaimed where appropriate on behalf of the child.
http://www.incademy.com/courses/Unit-trusts-and-OEICs/Capital-Gains-Tax/16/1007/10002

jimjames

Charliefiggis wrote: »

I think its that we have made the choice to put it so they cant get to it rather than a wish for it to be in trust.

The executor has just told me that we can move the dtf's from investment to savings, so will look into that because I dont want to loose any ot it which is what seems to be happening with the ctf's we have.

How old are the children?

Moving to savings may not be the best move - your nominal capital may stay the same but after inflation it will be worth a lot less in 18 years.

atush

if they all have CTFs and you don't like what is out there for them- look into a bare trust with an investment trust. But check to see if some of the big ones like F&C aren't still doing CTFs.

Leaving it in cash deposits can mean it losing over time to inflation.

Charliefiggis

Thanks for all the info, the kids are 3, 6 and 8 x