Inheritance money advice for child

HURDLING

Hello my two year old is set to inherit around 20000 and my wife and I need to set up an account where he can't touch it until he's 18 years old. We are struggling to find an account with a bank or building society. The isas are of no use as they can be touched or moved around. Any help with accounts etc would be appreciated?

eskbanker

HURDLING wrote: »

The isas are of no use as they can be touched or moved around.

What makes you say this? It's one of the defining characteristics of junior ISAs that the money can't be accessed until the child is 18, so surely they fit the bill for at least some of the money (the annual limit is £4K but as the new tax year is only about seven weeks away that can be £8K spoken for), preferably in S&S form.

Alice_Holt

With £20k I would be considering placing some into equity investments.

Certainly drip feed £4k pa into a JISA - Given your childs age I would suggest a Stocks & Shares Jisa.

Also you can put £3.6k pa (including tax reclaim) into a SIPP for your child - I would suggest looking at one of the Global Investment Trusts - Bankers, Scottish Mortgage, Monks etc.

Do NSI offer anything suitable for cash holdings?

getmore4less

Its £20k it may not be cost effective to take financial advice, problem is anything really save will just get erroded by inflation.

£200k would definately need it.

xylophone

You will hold the cash in bare trust for your child.

While money in the Junior ISA can be moved to another provider by the adult contact, the money cannot be accessed (except in the event of the death of the child) until the child turns 18.

The child could control the account from age 16 but would have no access to the funds until age 18.

https://www.gov.uk/junior-individual-savings-accounts/overview

Whether as bare trustee of a legacy you have power of investment as opposed to deposit is a moot point.

http://www.osborneclarke.com/connected-insights/publications/the-powers-and-duties-of-bare-trustees/

If you have (or are prepared to open) an ISA with Halifax, the 4% rate would be available to the child - you might consider the full £4080 this tax year and next and perhaps deposit the rest in a Nationwide Smart Limited Access until you can make the 2017-2018/2018-19 etc subscriptions.

Don't forget to complete R85 for the Smart account if you go down this route.