Keep Bare Trust or swap for an ISA

GrindaDecoy

Hi All,

A few years ago we opened up a Bare Trust investment account for my daughter via Baillie Gifford which has since been moved to Hargreaves Lansdown. The reason why we chose a Bare Trust at the time was that we were considering using it for school fees.  We never used it for school fees and won't need to in the future so technically we don't need it as a bare trust anymore.   I have seen a lot of news stating that Bare Trusts need to be registered with HMRC and tax paid etc etc, is it worth selling all the investments and moving them to an ISA?  We only pay the child benefit into this account monthly so there isn't that much in there - around 5k.  We have purchased various shares and investment trusts so do receive some dividends - not sure if that will cause issues?

Thanks

xylophone

You/spouse/both  gifted the money into Trust for your unmarried minor child.

Therefore income arising became subject to the "£100 rule". 

The £100 is per parent per child.


https://www.sharesmagazine.co.uk/article/beware-there-is-a-sneaky-tax-rule-that-eats-into-your-childs-savings#:~:text=This tax rule means that,though it's the parent's money.

Therefore it could be an idea to realise the investments and apply the funds to a stocks and shares JISA to which the rule doesn't apply.

HL offer a JISA which might suit or you could look elsewhere if you chose.