Investing for children - taxation

moneytroll

wmb194 said:

moneytroll said:

artyboy said:

moneytroll said:

Keep_pedalling said:

The rule is there to stop what you appear to be trying to do putting your money into there names but benefiting from the income. 

Why are you simply assuming that I would be benefitting from income? The income is to be reinvested. 

Well for starters, the very first sentence of your first post implies that it's YOU that wants to take advantage of THEIR allowance. Obviously if that was just poorly worded and you are gifting money to your children to be invested solely for their benefit, that is absolutely fine, subject to the usual caveats/risks of having feckless and irresponsible 18 year olds...

I don't think it's ambiguously worded at all. At no point did I say "I" or that the income would be for "ME". There seems to be some comprehension issues here. The children themselves cannot invest so a parent would need to do it for them and I don't understand why the government gives them a personal allowance but won't let them utilise it in any way.

Also I don't understand the logic here: it is ok for grandparents to put the money into a Bare Trust and use the income to pay for, say, private school fees, but it is not ok to do the same for the parents. I don't get it. I think the reason they encourage grand parents to do it and not the parents is because there is a bigger chance that one of them drops dead before 7 years are up.

The problem is that in the past so many people abused it that now the government doesn't trust you.

Me personally?  
even if that was the case, I can’t see what’s there to abuse all that much. A wealthy-ish family would put some of their money into a Bare Trust for the kids and use the income most likely to fund expensive school fees. Families that have kids don’t just have kids, keep them at home and instead use all of their income for themselves. Kids cost money no matter what. We are only talking about a personal allowance (private schools cost more than that) it’s not like they can put millions into trusts and not pay any taxes.