Global Child Brokerage Accounts - Non US

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Topic Author
Curny
Posts: 27
Joined: Fri Mar 17, 2017 9:09 am

Global Child Brokerage Accounts - Non US

Post by Curny » Sun Oct 13, 2019 9:03 am

Hi -

I have a young daughter and want to start investing on her behalf (gifts, birthdays etc).

What advice does the forum have? Is it as simple as an IB account and start buying VWRD?

My concerns are on how to eventually get the account into her name, reduce taxes, inheritance etc.

All help is appreciated.

[Currently based in HK]
Last edited by Curny on Tue Oct 15, 2019 3:21 pm, edited 1 time in total.

renue74
Posts: 1762
Joined: Tue Apr 07, 2015 7:24 pm

Re: Child Brokerage Accounts

Post by renue74 » Sun Oct 13, 2019 9:17 am

I've set up custodial account for my kids. Any money the make and wish to invest goes into their accounts.

There are some minor tax advantages. Earnings are taxed at their rate.

But, please know that upon 18, the child's account is owned by them. They can make bad choices and remove all $, if they wish.

TedSwippet
Posts: 2502
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Child Brokerage Accounts

Post by TedSwippet » Sun Oct 13, 2019 9:27 am

renue74 wrote:
Sun Oct 13, 2019 9:17 am
I've set up custodial account for my kids. Any money the make and wish to invest goes into their accounts. There are some minor tax advantages. Earnings are taxed at their rate. But, please know that upon 18, the child's account is owned by them. They can make bad choices and remove all $, if they wish.
The topic author is not a US resident or US citizen. They did not make that clear in this post, though they probably should have. Unfortunately, it's easy to forget this when posting quickly in the 'Non-US Investing' forum.

Anyway, for them a US based UTMA or UGMA custodial account is not relevant.
Last edited by TedSwippet on Sun Oct 13, 2019 9:43 am, edited 1 time in total.

fabdog
Posts: 770
Joined: Wed Jan 16, 2013 1:59 pm
Location: Williamsburg VA

Re: Child Brokerage Accounts

Post by fabdog » Sun Oct 13, 2019 9:29 am

Watch out on taxes, especially as you get more money in the account. Under the revised Kiddie tax laws, unearned income (dividends, interest, cap gains) in the UTMA accounts will be hit at trust rates, after unearned income passes $2100/year. The tax rates are posted below. This was a major change from the past, where that excess unearned income was taxed at parent's rate.

So low turnover, low distribution investments that compound capital gains and do not distribute work best if you are getting significant sums put away

Mike

2018 Trust and Estate Rates for Ordinary Income (Income Other Than LTCGs and Qualified Dividends)

10% tax bracket $0-2,550

Beginning of 24% bracket $2,551

Beginning of 35% bracket $9,151

Beginning of 37% bracket $12,501

2018 Trust and Estate Rates for LTCGs and Dividends

0% tax bracket $0-2,600

Beginning of 15% bracket $2,601

Beginning of 20% bracket $12,701

User avatar
F150HD
Posts: 2429
Joined: Fri Sep 18, 2015 7:49 pm

Re: Child Brokerage Accounts

Post by F150HD » Sun Oct 13, 2019 10:54 am

TedSwippet wrote:
Sun Oct 13, 2019 9:27 am
The topic author is not a US resident or US citizen. They did not make that clear in this post, though they probably should have. Unfortunately, it's easy to forget this when posting quickly in the 'Non-US Investing' forum.
A pretty big point there! Have fallen into this trap a few times. :|

Topic Author
Curny
Posts: 27
Joined: Fri Mar 17, 2017 9:09 am

Re: Child Brokerage Accounts

Post by Curny » Sun Oct 13, 2019 7:52 pm

TedSwippet wrote:
Sun Oct 13, 2019 9:27 am
renue74 wrote:
Sun Oct 13, 2019 9:17 am
I've set up custodial account for my kids. Any money the make and wish to invest goes into their accounts. There are some minor tax advantages. Earnings are taxed at their rate. But, please know that upon 18, the child's account is owned by them. They can make bad choices and remove all $, if they wish.
The topic author is not a US resident or US citizen. They did not make that clear in this post, though they probably should have. Unfortunately, it's easy to forget this when posting quickly in the 'Non-US Investing' forum.

Anyway, for them a US based UTMA or UGMA custodial account is not relevant.
Thanks Ted! Apologies all, Non-US. I am struggling to find material relevant to the topic hence may need to seek an advisor.

User avatar
BeBH65
Posts: 1555
Joined: Sat Jul 04, 2015 7:28 am

Re: Child Brokerage Accounts

Post by BeBH65 » Mon Oct 14, 2019 1:34 am

Where are you living? Can you add that to the title and body of the opening post. (Use the pencil symbol).

Your domicile will in a large way determine what is available to you. For example: in my country you are not allowed to invest money from children in the stock market until they are 16. It is considered too risky and hence bad guardianship of that money. Other countries will have different rules and possibilities.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

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