Saving for disabled child

richmondhamptoncourt

Hello
I wonder if anyone is in the same position and could offer some words of wisdom. I have been saving my disabled childs benefits of roughly £140 a week but realise its not a good idea as its in my name and I will have to declare it on my tax return as a higher rate tax payer. I have made a discretionary trust and can open a community account in the name of the trust with my bank but no interest paid. They do a savings community account but rate very low. As a trustee I need to get some sort of decent rate for the trust.

Where do others invest long term for a disabled child (under 5) who will never be able to handle his own money? I realise I will need to fill out a tax return for the trust once a bit more money is in it. Child already has child trust fund and savings accounts in his own name.

Thanks

atush

At over 7K per year. the total is more than you can put in a Jisa, but that is what I would do with the first 3600. As this is for the child longer term, I would also stress it needs to be in equities rather than cash as it not only needs to beat inflation it needs to grow in real terms.

The rest can be invested in equities in her name (your acct with the child as designee) but you can look into other trust scenarios. An investment trust savings plan is what I would suggest. See if that can go into your discretionary trust perhaps.

A child's pension could be a good idea with a portion of the money, if the child is expected to make middle age.

Whatever you do, you don't want to save the money in cash, as it won't grow sufficiently.

Later you will need additional trustees (and guardians ) for the child in case of yours and the child's father's deaths. gthey can look after the child and the child's finances.

xylophone

Jisa,

The child has a CTF and so is not eligible for a JISA.

Can a "vulnerable beneficiary" trust be set up? You would need expert advice on this point. http://www.hmrc.gov.uk/trusts/types/vulnerable.htm

You could then set up an investment in an investment trust or an OEIC in the name of the trust?
http://www.hl.co.uk for information?

atush

I didn't see the CTF but, but some Investment trusts like F&C still run them so I would transfer into one in equities like that and start putting in the max annual allowance.

And then, as xylo says, an invesment trust plan for the rest after you take advice on the most tax efficient way to do this into a trust.

Good luck and let us know how you get on.

richmondhamptoncourt

Thank you thats all very helpful!