Investing for Older Children

Question:

I am interested in investing a lump sum of £3,500 for each of my two children (aged 10 & 12) for a maximum of 5 years and would appreciate advice on highest returns and tax free advantages.

Peter

Answer:

Hi Peter, in response to your question due to the ages of your children they will be too young for ISA's unless you were to do an ISA in your own name and too old for Child Trust funds. One possible solution would be to look at Unit Trusts or OEICs (open-ended investment companies) which are essentially the same funds as an ISA without the tax-free wrapper. The potential tax liability would be for Capital Gains Tax but everyone has an annual CGT allowance of £10,100 so with the amounts of money you are talking about it would be extremely unlikely you would go above these sorts of gains in a single tax-year, if you designated the accounts to your children then this would be independent of any personal CGT liabilities you may have.

If this is something you would like to find out more about I would suggest speaking on the phone as there are plenty of options in the area of Unit Trusts and OEICs, with many providers and 1,000's of funds available but I could help with the decision process, please find my contact details below, regards, Steve

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Steve Weisner ~ Independent Financial Adviser ~ Radcliffe & Newlands ~ 5th Floor Crystal Gate ~ 28-30 Worship Street ~ London EC2A 2AH ~ sweisner@myeggnest.com ~ Tel (0845) 0217000 ~ Direct Tel (020) 73820437 ~ Fax (020) 73740462 www.rad-new.com

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