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Setting up a stock account for a minor.

  • 20-02-2020 8:56am
    #1
    Registered Users Posts: 644 ✭✭✭ timetogo1


    I want to set up an account for my daughter to put some small money into that she can control herself when she reaches 18.

    Anybody done this? Does it complicated things with revenue. I don't expect it'll be making much but ii want to take advantage of the tax free allowance each year.


Comments

  • Closed Accounts Posts: 32 ✭✭✭ DankeyKang


    What you need is a bare trust.


  • Registered Users Posts: 201 ✭✭ plasmin


    DankeyKang wrote: »
    What you need is a bare trust.

    Is this available in Ireland? How to go about it.

    Thanks


  • Registered Users Posts: 35 russtini


    Be interested in whether this is possible and costs /practicalities to run - has anyone managed to do this or know how to go about it?

    Thinking to move each of the kids savings in to a bare trust, buy a low cost ETF tracker plus add €3k a year gift allowance to save for their college education which they can then cash in at 18 when they'll need it and minimize tax.

    Main risk I see is allowing an 18 year legal access/ownership to say €50k at the end; rather than paying tax on everything and then drip feeding them 5-10k a year to pay for fees/accommodation etc. So need to have confidence in the kids maturity to not go all rock and roll with it!


  • Moderators, Business & Finance Moderators Posts: 7,821 Mod ✭✭✭✭ Jim2007


    DankeyKang wrote: »
    What you need is a bare trust.


    This is the kind of nonsense you should ignore. The person has no idea of the figures involved nor the actual objective.... but they have a solution....


  • Moderators, Business & Finance Moderators Posts: 7,821 Mod ✭✭✭✭ Jim2007


    timetogo1 wrote: »
    I want to set up an account for my daughter to put some small money into that she can control herself when she reaches 18.

    Anybody done this? Does it complicated things with revenue. I don't expect it'll be making much but ii want to take advantage of the tax free allowance each year.


    You can't open a stock account in the name of a minor.


    You can gift up 310k to a child, so what allowance are you trying to take advantage of, or perhaps you want to define what a small amount is....


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  • Closed Accounts Posts: 32 ✭✭✭ DankeyKang


    Jim2007 wrote: »
    This is the kind of nonsense you should ignore. The person has no idea of the figures involved nor the actual objective.... but they have a solution....

    Obviously speaking in general terms Jim, I'm sure the poster isn't going to take financial advice from an internet forum as an absolute.

    You mentioned that you can't open a stock account in the name of the minor. You didn't say that it's possible to purchase shares yourself and transfer them to a trust in your child's name. Small gift allowance up to €3k a year, from each parent so €6k a year in gifts, potentially €108,000 over 18 years, before any increases to the threshold which are very likely. I'm assuming that a small amount for the poster is under €6k a year. If it's not it's still an efficient way to transfer stocks to the child so that they can enjoy the 18 year gains.

    Any gains on the shares will be liable to capital gains by the trust when selling, which is not a requirement once the child turns 18. Any deemed disposals on ETFs chargeable to the trust also.

    This is basic and common tax planning and a way to free up the €335k (not €310k) threshold which in a lot of cases is needed to offset tax liability of inheriting the family home.

    Good of you to point out that I offered no solutions when a bare trust is exactly what the poster needs for the ultimate goal of transferring wealth to their child that is open to them once they turn 18.


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