Tax on shares invested for a child

[Lepearl]

Sorry if there is another more appropriate place to post this but couldn't seem to find a general forum on overall tax questions.

But to my question.

I have a 13 year old child of which we would like to put money into a indexed fund that pays dividends and have those dividends automatically reinvested. We would also be added a bit each year or so to the fund. Until she is around 25 or 26 and then she would get the result of the investment.

My question is what would be the most tax efficient way of doing this.

As we are starting with 20k and I do believe that tax on shares for under 18 can reach 66% which I think she would reach. Also is this the same if the shares are bought for a child but under an adults name. I would assume so since you can't buy shares until your 18.

Or we buy the shares under our own name. Let them run and then transfer them into her name when she's of the age of 25/6. With that would we just need to pay capital gains tax?

So my question is which as far as tax is concerned would cost less.

 

[rnr]

Sorry if there is another more appropriate place to post this but couldn't seem to find a general forum on overall tax questions.

But to my question.

I have a 13 year old child of which we would like to put money into a indexed fund that pays dividends and have those dividends automatically reinvested. We would also be added a bit each year or so to the fund. Until she is around 25 or 26 and then she would get the result of the investment.

My question is what would be the most tax efficient way of doing this.

As we are starting with 20k and I do believe that tax on shares for under 18 can reach 66% which I think she would reach. Also is this the same if the shares are bought for a child but under an adults name. I would assume so since you can't buy shares until your 18.

Or we buy the shares under our own name. Let them run and then transfer them into her name when she's of the age of 25/6. With that would we just need to pay capital gains tax?

So my question is which as far as tax is concerned would cost less.

Try this thread to get some ideas of the questions / research required before you visit a registered tax agent:-

Tax on Trust or Minor stock trading account?​

Cheers, Rob

 

[qldfrog]

In short, do not invest in her nameand stay clear of these education fund schemes

 

[dyna]

Stay clear of those "set and forget" Insurance Bonds, too, as they pay tax at the standard company rate of 30% .

 

[Lepearl]

Thank you so much for the answers.