We'd like to buy shares for our kids, is this doable?
Q.
We have three children, ages nine, eight and five. We want to
buy our eldest some shares for her 10th birthday to get her
interested in the share market, and we will do the same when the
other two children reach their 10th birthday. We are hoping to buy
the shares in her name but have read there are legal reasons for
not doing this but can't find out what they are. Tax issues are not
a problem as we will only be buying $2,000 worth of shares and she
has no other income. We are happy to do an annual tax return with
her for franking credits - she will find that interesting
too.
A.
You could get around it by buying them in your name as trustee
for the child. Just make sure you liaise with your accountant or
financial adviser so as not to be caught under the punitive
children's tax rules.
Each week financial advisor Noel Whittaker answers your
questions.
