Unit trust transfer to grandchildren

Camper2

I have 4 grandchildren (ages 9,17,19,21) and I’d like to transfer ownership of these Unit trusts to my grandchildren- this I can do for the 19 and 21 year old but not the other two. 

Should I transfer the Unit Trusts to my daughter (high tax payer) or find some other way to pass the money to my other two grandchildren?

xylophone

Do the  two younger ones have Junior Isas?

Perhaps the units could be sold and the cash gifted into the accounts and used to buy investments.

If there is money over it could be gifted into an account like this for the youngest child and used in subsequent tax years to contribute to JISA.

https://www.skipton.co.uk/savings/childrens-savings-accounts/childrens-trust-saver

Presumably the 17 year old has a savings account?

poseidon1

Camper2 said:

I have 4 grandchildren (ages 9,17,19,21) and I’d like to transfer ownership of these Unit trusts to my grandchildren- this I can do for the 19 and 21 year old but not the other two. 

Should I transfer the Unit Trusts to my daughter (high tax payer) or find some other way to pass the money to my other two grandchildren?

In case you are unaware, gifts of assets that would be liable to capital gains tax if sold, are equally liable to CGT on the donor if gifted. The taxable gain is calculated by reference to market value at date of gift.

The only way to defer taxable gains on the donor in these circumstances is to gift into discretionary trust on behalf of the grandchildren concerned. However such an arrangement is only appropriate for high  6 figure valued gifts, and even here it's a tremendously complex and expensive exercise, so only for very wealthy appropriately advised individuals.

In your case might make more sense to sell the unit trusts, pay your personal CGT and gift the net cash remaining to be reinvested as suggested by @xylophone.

Camper2

Thank you xylophone and poisedon1 - interesting points as I hadn’t considered CGT (not having sold assets before). As for Junior ISAs, I hadn’t considered them as my young grandchildren don’t pay income tax so I couldn’t see the advantage of them. 

It does seem difficult to buy investments for children because their ages disbar them from many products. 

We are talking about £10k each so, although not to be sniffed at, not a fortune needing discretionary trusts. 

I’m 75 so I’m presuming the sooner I get on with this the better, or does having paid my CGT on the assets mean that there would be no tax liability on the grandchildren if I died before 7 years?

GrumpyDil

Assuming you are thinking of IHT then no paying CGT doesn't have any affect on the question of IHT.

xylophone

£9000 this year and £1000 next into a stocks and shares JISA over 8/9 years could show a reasonable return and be a good basis for the future.

Fidelity and Hargreaves Lansdown are often given favourable mentions as platforms - https://monevator.com/low-cost-index-trackers/

https://monevator.com/passive-fund-of-funds-the-rivals/ might be worth a read.

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