For Immediate Release: Tuesday 29 August 2000
INVESTING FOR CHILDREN
AUTIF's free guide to investing on behalf of children
Nobody under the age of 18 can enter into a legally binding
contract, which means that they cannot normally buy or hold
investments. The Association of Unit Trusts and Investment
Funds (AUTIF) has produced a ‘Saving for Children’ factsheet
which looks at how an adult can invest on behalf of a child.
The factsheet includes details of:
- Designated accounts – an informal way of recording
the fact that the investment has been bought for and is
held on behalf of another person
- Bare trusts – a simple type of legally binding
document which formally records that an investment has been
made on behalf of another person
- Individual Savings Accounts – an ISA cannot be
taken out on behalf of a child but can of course, be used
as a way of saving money to give to them when they are older
- Tax – an adult investing in an investment fund
on behalf of another person will not usually have to pay
tax as a result of the gift, although gifts do have tax
consequences. The tax treatment of income from investments
will depend on whether the adult investing is a parent or
not.
Anne McMeehan, Director of Communications at AUTIF commented:
"Children frequently receive gifts of money from parents
and other relatives. These are often put straight into a
bank or building society account where the returns can be
minimal over the long term. But there are alternatives.
By investing on their behalf in a unit trust or OEIC, a
parent can ensure that their child’s savings grow into a
really useful nest egg, so that when they grow up and want
to buy their first car or travel the world, they can have
the funds to do just that!
However, anyone investing on behalf of a child needs
to be aware of the tax implications; this factsheet will
help point investors in the right direction".
Readers can call the Unit Trust Information Service on +44 (0)20
8207 1361 (manned 24 hours a day) for a free copy. This factsheet,
along with AUTIF’s range of consumer literature, can also
be viewed on the AUTIF website.
For further information please contact:
Anne McMeehan, Director of Communications,
AUTIF - +44 (0)20 7831 0898
Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898
|
