Executor investment advice on behalf of a 17yr-old

Executor_2

I am looking after a large sum as an executor of my late sisters estate for her 17 yr-old son (18 in March next year)-18 is when he can inherit the money in his own right of course.
I've looked at several accounts but banks don't want to open an account in these circumstances ie: an executor investing on behalf of a 17yr old particularly their best rates which tend to be online a/cs. The Nationwide have indicated THEY can deal with us as have the Derbyshire and no doubt there are more. I am wanting to start him off with an ISA and hope he keeps it up (?) and investing the balance in the best account I can for a year or two (my nephew has said he is happy to wait an extra year to get a better rate).
Basically I'd like advice from anyone who has been in this position as getting general advice from the institutions I've been to has been painful and has almost always required them to go away and talk to someone else!!::(

xylophone

http://www.nsandi.com/contact-us-helpful-information-faqs-can-i-invest-trust
As it is under a year to the time when he is entitled to access and control, the Income Bonds option might suit? http://www.nsandi.com/savings-income-bonds
and put the monthly income into the Investment account also held in trust?
The interest is paid gross which might save trouble see below.

Otherwise you might check here http://www.money.co.uk/savings-accounts/1-year-fixed-rate-bonds.htm to see which would allow you to hold one of these in bare trust for a year.

As the child is over 16 and you are would be holding in bare trust, you would not be able to submit an R85 on such an account even if he is a non- taxpayer - any interest overpaid would have to be reclaimed on R40.

If you go for the NS&I and the child is eligible to pay tax, HMRC will need to be advised.
http://www.hmrc.gov.uk/taxon/bank.htm
http://www.hmrc.gov.uk/taxon/worked-examples.htm

dzug1

It is a question of finding a bank, etc, that is wiling to open this type of account - many as you have found out won't.

If he were younger you would also be well advised to consider equity investments for part of the money, but given the short time before he becomes entitled to it it's more debatable as to whether it's worth while. If you think he would want to leave part of the money invested for the long term it might be though.

The trustee investments acts require you as a trustee to take 'appropriate advice' (I think the wording is) on investments. By which they mean professional advice in most circumstances. Consider consulting an IFA.

robtgossard

I suggest waiting till the time he turns 18 would be better than making decisions in a rush which could later create financial complications.