We can help you decide the best way to invest for your children’s future.  A wide range of Bare (or Absolute) and Flexible Investment Trusts are available.

When saving for children, the tax treatment of the investment is often dependent on the investment held and the structure.  Whilst Friendly Society Savings plans offer tax free returns, the amounts that can be saved are relatively small and the charges can be on the high side with limited flexibility.  Alternatives are to invest in a collective investment held within a trust for example.

A bare trust makes the investment the child's from an estate planning perspective and where the gift is not from a parent the income is taxable against the child's personal allowances.  Where the gift is from a parent and the annual income is more than £100 then this is taxable against the parent.  Any growth in the account will use the child's personal capital gains tax allowance so the growth should be tax free with careful use of this allowance regardless as to who made the gift.  Under the terms of a bare trust the child will own the proceeds from the age of 18.

Another method of saving is the Child Trust Fund which offers tax free returns with a kick start payment of £250 from the Government with further payments potentially being made throughout the lifetime of the account.  Contributions of up to £100 per month can be paid into the account and any income or capital gains are not liable to tax; returns are tax free.