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Investment for/by a child

  • 01-06-2023 12:01am
    #1
    cathy01
    Registered Users, Registered Users 2 Posts: 2,269 ✭✭✭


    Hi

    I wanted to put some.money into some type of investment fund for her.Its her money .she is a child.I wanted a long term 5 or 10 uesr but my local bank said they can't do it.

    Any suggestions.



Comments

  • #2
    [Deleted User]
    Posts: 281 ✭✭ [Deleted User]


    Why the need to put the ownership of the money in the childs name?

    You can do one of these savings contracts in your own name. But, I'd not buy it from the bank as it's (probably) going to be 25%/50% more expensive via a different distribution channel.

    Shop around or ask someone else who has a unit-linked savings/investment what it's costing them and where did they buy it.



  • #3
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,769 ✭✭✭✭Peregrinus


    You can put an investment in your own name and make a note that it actually belongs to your child; you are holding it purely on her behalf. The bank or investment house doesn't need to know about the note, so long as it's clear in your own records so that if, God forbid, you die while she is still a child the administrator of your estate will know that the investment is not yours and does not form part of your estate. You should also include an acknowledgement of this in your will.

    Any income earned on the investment is not your income and you do not have to pay tax on it. It's your child's income but, unless the investment is very large and assuming she has no other income, it probably won't be enough that she has any need to lodge a tax return or anything of the kind. If it's interest income it will be subject to DIRT and there is nothing you or your child can do about that.

    Once your child becomes an adult - i.e. turns 18 - she is absolutely entitled to the investment and you must transfer or pay it to her if she wants you to. You cannot withhold it on the basis that you think she will use it unwisely, and you cannot attach conditions to it.



  • #4
    Shedite27
    Registered Users, Registered Users 2 Posts: 9,450 ✭✭✭Shedite27


    https://www.boards.ie/discussion/comment/120688899#Comment_120688899

    How legally binding do you think "make a note" will be if the tax man comes looking for their cut of the inheritance? I'd be surprised if it's much.

    OP, there are savings accounts called Bare Trusts that will make it official, creates an investment account for the child, which they will own, you can contribute each month/year, when the child becomes 18, you can hand over the details to them and they don't pay inheritence tax on it.



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