Q.
I am the executor of my father's will and he has left an amount
of $25,000 to my cousin, who is under 18. The money is to be
invested by me until my cousin turns 18 in another nine years. Can
you please advise the best type of investment so that I am not
personally liable for any interest earned on the investment?
A.
It appears from the information supplied that you will be acting
as trustee on behalf of the child. If this is the case it is purely
a matter of your holding the asset as trustee for the child -
because this is a bequest you will be taxed, as trustee, at normal
personal rates. As the first $6,000 of income is tax free there
should be no annual tax liability on the earnings.
Each week financial advisor Noel Whittaker answers your
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