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Purchasing shares for kids

Newbie

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Replies 1

Hi

 

Is there a way for parents to purchase shares for their children and keep them under the children name? Do they need to lodge annual tax return as well?

 

Obviously the gain/loss will be tracked individually as well.

 

Regards

 

 

Filbert

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 0

Hi @Filbert ,

The key point is that some income from children under 18 is taxed at higher rates, if it was not from their own efforts eg given by parents. Please consider steps, especially 'Step 2' as per Item A1 Under 18 2020 . If investments in childrens' names are related to the examples given, then they will be taxed at normal rates ('excepted income'). If not, than it will be at higher tax rates. 

 

You can also check Do i need to lodge a tax return 2020?. There is a criteria quoted here -

"You received income from dividends or distributions exceeding $18,200 (or $416 if you were under 18 years old on 30 June 2020) and you had

  • franking credits attached, or
  • amounts withheld because you did not quote your tax file number or Australian business number to the investment body."    (italics, bold added)

You may want to seek independant financial/taxation advice also, when considering these investment options.

 

Thanks,

1 REPLY 1

Most helpful response

Former Community Support

Replies 0

Hi @Filbert ,

The key point is that some income from children under 18 is taxed at higher rates, if it was not from their own efforts eg given by parents. Please consider steps, especially 'Step 2' as per Item A1 Under 18 2020 . If investments in childrens' names are related to the examples given, then they will be taxed at normal rates ('excepted income'). If not, than it will be at higher tax rates. 

 

You can also check Do i need to lodge a tax return 2020?. There is a criteria quoted here -

"You received income from dividends or distributions exceeding $18,200 (or $416 if you were under 18 years old on 30 June 2020) and you had

  • franking credits attached, or
  • amounts withheld because you did not quote your tax file number or Australian business number to the investment body."    (italics, bold added)

You may want to seek independant financial/taxation advice also, when considering these investment options.

 

Thanks,