Gifting money (/investments) to a child
Discussion
My sister is pregnant and when my nephew/niece is born I would like to gift £x,000 to him/her, preferably in the form of some kind of investment account that will (hopefully) grow and I would prefer it could only be accessed by them (on their (18th? 21st?) birthday)
Is it even possible for me to do this? Cursory Googling I’ve done indicates at least that a Junior ISA needs to be opened by the parent(s) rather than by a third party. What other options are there?
Is it even possible for me to do this? Cursory Googling I’ve done indicates at least that a Junior ISA needs to be opened by the parent(s) rather than by a third party. What other options are there?
Toaster Pilot said:
My sister is pregnant and when my nephew/niece is born I would like to gift £x,000 to him/her, preferably in the form of some kind of investment account that will (hopefully) grow and I would prefer it could only be accessed by them (on their (18th? 21st?) birthday)
Is it even possible for me to do this? Cursory Googling I’ve done indicates at least that a Junior ISA needs to be opened by the parent(s) rather than by a third party. What other options are there?
Assuming you have made no other gifts this tax year you can gift your nephew/niece up to £3,000 (£6,000 if you made no other gifts last tax year - as you can carry that allowance over) without the gift being subject to IHT if you don't survive 7 years from the date of making the gift.Is it even possible for me to do this? Cursory Googling I’ve done indicates at least that a Junior ISA needs to be opened by the parent(s) rather than by a third party. What other options are there?
Gifts of more of this will be subject to IHT in the event of your death within 7 years.
You cannot open a JISA for him/her, but your sister can and then you can contribute to it.
Minors cannot have assets such as shares/OEICs etc directly themselves.
You'll need to have them held as a nominee account, effectively a bare trust which will then become theirs at 18, without exception. Unless its a significant sum which may make other trusts more appealing, the costs probably preclude on smaller sums, due to greater flexibility.
You'll need to have them held as a nominee account, effectively a bare trust which will then become theirs at 18, without exception. Unless its a significant sum which may make other trusts more appealing, the costs probably preclude on smaller sums, due to greater flexibility.
my parents gave me around 6k when I turned 16... spunked it all...
while this sounds like the money was a massive waste it was actually a very very good lesson to me and has taught me great discipline (be it a rather expensive one)
In terms of doing it I think they used a regular bank account where they had full access. This can obviously be done with any other form of investment though I think I would let the economy settle a little bit before I began to think about investing (though now could be a good time to make money it could also be a very bad time) Good luck
Edit- Didn't register this was your nephew/niece...
Like it has been said before and since you have a few years to gift this money across you can use this to your advantage to avoid tax implications
while this sounds like the money was a massive waste it was actually a very very good lesson to me and has taught me great discipline (be it a rather expensive one)
In terms of doing it I think they used a regular bank account where they had full access. This can obviously be done with any other form of investment though I think I would let the economy settle a little bit before I began to think about investing (though now could be a good time to make money it could also be a very bad time) Good luck
Edit- Didn't register this was your nephew/niece...
Like it has been said before and since you have a few years to gift this money across you can use this to your advantage to avoid tax implications
Edited by Michaelbailey on Wednesday 12th December 16:08
Eric Mc said:
Effectively you can give what you like to whoever you like - just try not to die within seven years of making the gift.
Just curious but what if a gift was given of a decent amount but due to an accident or critical illness a few years later meant the person gifting passed away? No signs of any problems but s
t happens. Could it be argued the person gifting money was sound and able?If the person dies within 7 years from whatever cause, accident, illness, old age etc, then it is counted towards their estate and inheritance tax could be applied. It's done on a sliding scale though I believe, ie if they died after 5 years, the whole gift wouldn't be counted only a percentage of it. Might be wrong about that but sure I read it somewhere.
As for the original post, you could get your sister to open an isa, then you can add to it yourself as and when you please, up to the isa limit which for a junior is just over 4k a year.
As for the original post, you could get your sister to open an isa, then you can add to it yourself as and when you please, up to the isa limit which for a junior is just over 4k a year.
Chuffedmonkey said:
Eric Mc said:
Effectively you can give what you like to whoever you like - just try not to die within seven years of making the gift.
Just curious but what if a gift was given of a decent amount but due to an accident or critical illness a few years later meant the person gifting passed away? No signs of any problems but st happens. Could it be argued the person gifting money was sound and able?
Eric Mc said:
Effectively you can give what you like to whoever you like - just try not to die within seven years of making the gift.
There is a sliding scale reducing the liability over those 7 years. https://www.gov.uk/inheritance-tax/gifts
eliot said:
There is a sliding scale reducing the liability over those 7 years.
https://www.gov.uk/inheritance-tax/gifts
I suspect he knows that. https://www.gov.uk/inheritance-tax/gifts
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