Investing for kids in Australia | How to invest on behalf of your children
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- Опубликовано: 23 июл 2024
- This video explores ways of investing for your children. It is specifically designed for Australian residents so please keep that in mind when watching the video. I discuss all relevant structures including investing in the child's personal name, investing in the parent's name, informal trusts, investment bonds / insurance bonds, discretionary family trusts and even a curve ball with superannuation. ENJOY!
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You're so right re: investing if you have the means. Great opening, I'm subscribing.
That's a key point. I want to invest for my kids and their future. However I don't know exactly what that means. Thank you for sharing this. You've helped me know at least where to start "what's the reason for the investment? 1st home? School fees? Retirement...etc". Thank you for sharing your knowledge.
My pleasure! I'm glad you found it helpful
This video is underrated! Super helpful insights
Thank you 🙏
Top work! 😉
great video, Brad! Very useful, I've shared with some people that have kids and will definitely love this content
Thanks mate, I appreciate that
Great video 👌 there is definitely a lack of information (in Australia) regarding this topic. I'm so glad you've made this video!
I'm just wondering would a custodial account be what you mean by informal trust?
Thanks Katherine 😊 Custodial often refers to the brokerage platform model whereby the shares are held in custody for the account owner as opposed to directly owned by the person but I guess you could also be considered the custodian for your child 😊
Thanks for making this video! What if we apply TFN under child's name? Does it avoid high tax rate but subject to normal marginal tax?
As trustee for - as per asic the income will come under minor tax rule. If the parent pays tax on income (as you say), the cgt will be triggered when transferring the stocks to child at 18. Please correct me if i am wrong.
I have seen the Vanguard Kids account as an investment option for children, but should it be considered high risk because its not held in the buyers name?
Love this video and helped my investment strategy, may I ask whether informal trust is different from family trust? How to set up informal trust? Accountant?
Hi Trace, glad you liked it! Yes, an informal trust is different to a family trust (it's much simpler). You don't need an accountant to set it up, you simply set it up when you set up the account
@@GuidedInvestor Thanks for your reply! I will do some research on this when opening an account.
Also sorry one more question, if we only have 3 members, one is kid, one is Self-employed, one is high tax payer, does it worth using trust? But I'm thinking along the way when the fund size is getting bigger in 15-20 years, if I don't set it right at the beginning, that would be having high CGT, but initially the initial investment return may not cover the cost because of small capital?
Really depends on how much you are investing and your personal tax rates aswell...
Quick question...where and who do you approach to get an Investment Bond set up and what works better...an Investment Bond or a Family Trust in terms of wealth creation and lower taxes so my kids get a better result at the end of the day?
Investment bond returns are absolute shite..
drat i misunderstood the title. what about when your kids have their own legit earnings? what can they consent to invest their own money in??
Haha I was actually worried it might be read wrong! Any suggestions for a better title?
If your kids qualify as an excepted person because they are working then generally they can invest like an adult and be subject to the standard marginal tax rates...
@@GuidedInvestor best as we know, kids can only have bank accounts until 16, then can have spaceship investments. but no stocks or crypto until age 18?
Is it feasible to invest money for my grandkids into my own super then gift it to them when they are 21 (currently 5 and 3) either as a lump sum or used to buy shares in their name at that time.
Yes there are a few things to watch out for. For instance, you need to ensure you can access the money at the date you want to gift it, it may impact centrelink entitlements, it will be hard to separate what is the gift money and what is your money. That is just to name a few things off the top of my head...
@@GuidedInvestor thank you good food or thought 😊
What are the implications for a 16 year old teenager investing their own money into the market (earned from a part time job and helping them to start forming the habit of saving and investing). The amount would be quite small, and it's hard to see them earning over $416 in dividends each year if they are only investing a small amount into an ETF for example. Can those investments continue to grow in value with no other implications until they eventually sell and trigger CGT?
It is definitely feasible owing it in teenagers name if you are only investing a small amount. Just be aware that capital gains also form part of the income which is taxed at the higher rate for minors. You also want to make sure that you are using a very low or no cost brokerage platform when investing small sums
Is the $416 impacted by the income a child may get from a job. E.g if a child works and earns $1000 a year , the investment income of that child would get taxed at 45%/66%?
The high tax rate is applied on the income earned from the money - e.g bank interest once the $416 threshold is reached. Therefore the child's earnings are not directly adding to this, but if they had a lump sum saved up and accrued $416 or more in interest on their money for the financial year, they would then be taxed on the interest earned above the threshold