if you're looking for a tax efficient way to provide for a child then one
thing that you could consider is the use of a trust a bear trust or a simple
trust in this video I want to take a look at what is actually a trust is and
what is the value or benefit to you indeed to the donee to the child to the
minor child of using a bear trust for the purpose of a tax efficient way of
perhaps providing further education or giving them a property without without
them gone bananas are too early an age in other words you can put the thing
into trust for the property or the asset in the trust you can also give cash
though or provide for education or fees university fees and so on so it is
actually quite a significant tax saving to be garnered if you use a trusted
facility a bare trust so let's take a look so firstly as I say it's a very
very tax efficient way to provide for a miner and the bear trust means that the
legal ownership and the beneficial ownership is split so the legal owner
will be a trustee whoever you appoint as a trustee and that trustee will be
registered as the legal owner of for example a property and they will be
holding that property for the benefit of the beneficiary the miner and the miner
then will be able to get his or her hands on the property when he or she
comes of age at the age of 18 so there's basically three parties in a bare trust
just the creator of the trust that's a settler that could be you for example
just a trustee you can have more than one trustee so you could be a trustee
along with somebody else perhaps the parent of the child if you're a
grandparent and then there's the beneficiary and so legal ownership is
transferred to the trustees they hold the property for the benefit of the
Bennett who can then take the property when he
or she comes of age at the age of 18 the tax benefits though in relation to a
bare trust are worth taking a look at does a small gift exemption that you can
have of 3000 euros per year her parent to a child so a parent can give a child
3 grand a year and there's a tax-free a small gift exemption so for two parents
that means it's 6,000 per child per year and over 18 years then that amounts to a
tax benefit a tax-free gift of 108 thousand so it's possible therefore they
give a child a whole of net grand over 18 years through a bear trust and have
no tax implications whatsoever not only that but this exemption this small gift
exemption does not affect the exemption the group threshold for child receiving
a gift or a bequest from a parent so currently the grouped threshold for
child in 2019 is 320,000 that means that a parent can give a child a property up
to the value of say 320,000 and that will be tax-free both the small gift
exemption is an additional break an additional tax break and so that does
not affect the group threshold for child so in relation to a property real
property a house for example or a field or a farm or something the transfer is
taken or taken out versus where the property transferred to the trust for
the child so if the house is worth for example two hundred thousand into 2019
then that is the benefit that is the value that's part of the house for
capital acquisitions tax purposes in other words the days when the property
is transferred into the trust so the property could be transferred into the
trust in 2019 a 200 grand doesn't be completely covered by the tax
the group's threshold for the child and if the house then appreciates to the
value of four hundred thousand by 2013 or 37 when the child is 18 I can take
the property at that stage you don't have to worry about or the child to have
to worry about the four hundred thousand value of the house because for capital
acquisitions tax purposes the value of the house is the value at the dais which
at the date of transfer of the house into the trust and that could be as I
say 2019 so transfer the house into trust
the child is only you know zero or one year of age or six months or whatever or
you could do it later on but the bottom line is from a tax perspective capital
acquisitions tax will levy any tax at the date that the property is
transferred into trust so for an asset that's got to appreciate in value it's a
very very tax efficient way setting up a bare trust to transfer a property or an
asset to a child a minor child as I said there on the screen
the house is violent at a lower figure for tax purposes if transferred into the
trust for child settler must remember couple of things however the settler is
going to be you for example if you are going to settle property on a minor
child one that the asset was the asset is transferred it cannot be taken back
so it's into the trust and that's it it's for the benefit of the child and he
or she can ultimately then when he reach this or she reaches the age of 18 can
call the trustees to transfer the assets to him or her so that's something that
you just need to be clear about that you're not going to change your mind and
that you're not gonna need the property back and you also need to consider who's
going to act as a trustee though the settler can also be one of the trustees
it's recommended that you have at least two trustees you can have only one but
if you have two trustees then the trustees can be yourself and somebody
else and that is a bare trust or simple trust as I say it's a tax efficient way
to look after a minor hope you find this video useful my contact details on the
screen there if you do find it useful and be
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