Childrens' savings/investments/pensions

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  • anandp
    anandp Posts: 279 Forumite
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    xylophone wrote: »
    It seems to me that unless the donors/parents are prepared to accept that access and control belong to the child at the age of 16/18, they should not use s Bare Trust.

    Agree, but there don't seem to be any alternatives really. JISA's and Bare Trusts have the same access problem at 18 (though perhaps not automatic access with a Bare Trust), but all others are effectively treated as if they were your own money (so taxed as yours) until its transferred over with all the gift/IT implications that ensue.
    Interested in property investment, web tech, social media, forex, equities. Also a proud father & entrepreneur of sorts.
  • anandp
    anandp Posts: 279 Forumite
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    Alexland wrote: »
    For us one of the advantages of the BG CSP account is that it can be setup without Bare Trust to retain control otherwise we would just add more into the Junior ISA.

    Alex.

    Isn't this then counted as part of your own estate then? For tax purposes.
    Interested in property investment, web tech, social media, forex, equities. Also a proud father & entrepreneur of sorts.
  • Alexland
    Alexland Posts: 9,653 Forumite
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    anandp wrote: »
    Isn't this then counted as part of your own estate then? For tax purposes.

    Yes which is why it's in my wife's name as she can take the dividend income without affecting child benefit, we will pace withdrawals to avoid capital gains and she is younger so less likely to have an inheritance tax liability on gifting this to our son at the right time.

    Alex.
  • louloubelle79
    louloubelle79 Posts: 411 Forumite
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    Alexland wrote: »
    Yes the Bailie Gifford Childrens Plan has been quietly processing in my head and I am minded to open one for my 2 yr old son as it would be good to continue investing for him with a small regular contribution after we have added the 2 tax years of Orbis JISA contributions into no-fee units.

    Alex.

    Hi Alex; so I’m trying to understand this can be set up in my name for the child? How does this differ to an adult ISA? Sorry if daft Q

    https://www.bailliegifford.com/en/uk/individual-investors/literature-library/individualintermediary-non-fund/investment-trust/childrens-savings-plan-application-pack/
  • Alexland
    Alexland Posts: 9,653 Forumite
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    edited 19 March 2018 at 1:50PM
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    louloubelle79 wrote: »
    Hi Alex; so I!!!8217;m trying to understand this can be set up in my name for the child? How does this differ to an adult ISA? Sorry if daft Q

    https://www.bailliegifford.com/en/uk/individual-investors/literature-library/individualintermediary-non-fund/investment-trust/childrens-savings-plan-application-pack/

    Yes, it can be setup either under the adult's name (by just registering online) or in trust in the child's name (by completing the paper form).

    The children's plan is not in a tax free wrapper like an ISA so any dividends or capital gains could be taxable if you exceed your annual dividend and capital gains tax allowances. The dividends still count as income if you are near the child benefit claw back level, etc. We chose Monks as it aims for growth so has a low dividend and we will withdraw it across multiple tax years if capital gains becomes a concern. We have set it up for £50 per month via direct debit and the first payment is going out later this month.

    If you want it simpler then BG do offer an adult S&S ISA but it's £32.50 +vat per year.

    Alex
  • Reaper
    Reaper Posts: 7,283 Forumite
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    louloubelle79 wrote: »
    Hi Alex; so I’m trying to understand this can be set up in my name for the child? How does this differ to an adult ISA? Sorry if daft Q

    https://www.bailliegifford.com/en/uk/individual-investors/literature-library/individualintermediary-non-fund/investment-trust/childrens-savings-plan-application-pack/
    Alexland wrote: »
    The children's plan is not in a tax free wrapper like an ISA so any dividends or capital gains could be taxable if you exceed your annual dividend and capital gains tax allowances.
    Just to clarify - you can set it up either as:
    Designated Account - means it is taxed as YOUR money
    Bare Trust - means it is taxed as THE CHILD'S money.

    Although neither is tax free the child has an adult's tax allowances which are probably not being used at the moment so in practice is unlikely to be taxed. Whereas there is more chance you have already used up your own tax allowances.
  • xylophone
    xylophone Posts: 44,427 Forumite
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    Hi Alex; so I!!!8217;m trying to understand this can be set up in my name for the child? How does this differ to an adult ISA? Sorry if daft Q

    https://www.bailliegifford.com/en/uk/individual-investors/literature-library/individualintermediary-non-fund/investment-trust/childrens-savings-plan-application-pack/

    Explained on page 7. This is not a JISA or an ISA.
  • anandp
    anandp Posts: 279 Forumite
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    Just done some more research and the only two investment accounts I can find which seem to be directed at grandparents saving for their children are with Hargreaves Landsdown and Baillie Gifford. Both seem to make it very easy to open the account in a bare trust.

    I'm only searching for options under £100 per month, so others may be available at the higher levels.
    Interested in property investment, web tech, social media, forex, equities. Also a proud father & entrepreneur of sorts.
  • Reaper
    Reaper Posts: 7,283 Forumite
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    edited 19 March 2018 at 6:04PM
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    anandp wrote: »
    Just done some more research and the only two investment accounts I can find which seem to be directed at grandparents saving for their children are with Hargreaves Landsdown and Baillie Gifford. Both seem to make it very easy to open the account in a bare trust.
    I think you will find most of the Investment Trust companies offer it plus a variety of others. eg Foreign & Colonial
    https://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/childrens-investment-plan/

    And yes a Bare Trust is very simple and the investment companies will set it up for you. You only need to fill in a form and choose who will run it.
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Reaper wrote: »
    I think you will find most of the Investment Trust companies offer it plus a variety of others. eg Foreign & Colonial
    https://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/childrens-investment-plan/

    And yes a Bare Trust is very simple and the investment companies will set it up for you. You only need to fill in a form and choose who will run it.

    The F&C option at £25+vat PA is going to be expensive for a small contribution rate.
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