Bare trust investment account for child

[smndly]

Hi,

I’m looking at trying to set up a bare trust for our son who is 6months old.

Likely funded monthly by his 3 grandparents. I’ve searched this forum and see the Zurich fund is popular but looks like it’s deemed disposal and Zurich charge a hefty fee.

I have my own DEGIRO account and would be comfortable managing a separate account with DEGIRO or any other execution only broker for my child but it seems DEGIRO no longer offer minor accounts.

Is there anyway I can set up a bare trust execution only investment account with the likes of degiro or trading212 for my son to avoid deemed disposal tax and high fees?

Thanks

 

[Steven Barrett]

Trusts do not avoid tax on the investment. You are avoiding running down inheritance tax.

Setting up a bare trust investment plan is a complex structure. You can get a solicitor to draw up a trust document for you and use degiro. Good luck with trying to do a complex structure on the cheap.

 

[ClubMan]

I think that Davy and Interactive Brokers may do bare trusts that allow investment in assets subject to CGT rather than deemed disposal/exit tax taxation. I don't know what their charges are like - probably more than investment fund based care trusts though. But, in addition to @Steven Barrett's comments, do you really want to be taking on the burden of administration regarding filing CGT returns on the minor's behalf etc. assuming that the broker doesn't do this? Surely a fund based bare trust is simpler all round?

 

[ClubMan]

Trusts do not avoid tax on the investment.

I read it as (how) can I set up a bare trust that can invest in assets subject to 33% CGT taxation rather than just investment funds subject to 41% deemed disposal/exit tax? Presumably on the basis that the tax treatment may end up being less onerous plus retaining latitude over the specific investments (which could be a good or a bad thing...)?

 

[GSheehy]

Likely funded monthly by his 3 grandparents.

Zurich Life wouldn't do this on the one contract.

You have no idea what the life assurance exit tax regime will look like next December, never mind when this might come to maturity/encashmemt.

You buy what's available and that's specifc to the purpose. If something cheaper/better comes along then you buy that. That, or do nothing.

 

[smndly]

Ok looks like this is going to be difficult to set up. Agree I don’t want the overhead of that.

So is there any way to set up an investment account for my kid where different people can add money to it or am I stuck with a low interest savings account?