In the UK there are Bare Trusts...what can you do here for kids?

I'd also be interested in this, but with a slight twist.

I'm about to become an uncle for the first time, and when the child is born I'd like to put some money in a trust for her. However she will be born and will grow up in England, and I (although a British National) am a B permit holder and resident in Switzerland.

Is there anything in CH that would allow for this and nicnac's situation?

hi Nicnac, I'm not familiar with bare trusts, but I think it might be what's called a custodial savings account in the US. I am about to open one for my godchild and am just comparing terms and interest rates. Here's an example I found in English:
http://www.postfinance.ch/pf/content...ift/offer.html

We have something setup for our son through Zurich insurance, can give you the details of my contact there if you like.

Why would you want to complicate the child, and the child's parents, UK tax affairs? Every child born in Britain since 1 September 2002 has a Child's Trust Fund. A parent, relative or friend can contribute £1,200 in total each year (the Government contributes £250 at birth and at age 7). This applies to every child, British or not, for whom child allowance is paid.

If the parents are able to contribute the full £1,200 then you can't add more. Otherwise you should. See this, for example: http://www.thechildrensmutual.co.uk/ (I pay in for my grandchildren's CTFs)

One problem for cross-border trusts is that they are not qualified for tax purposes in other countries. In theory (in practice few bother) the taxpayer is supposed to declare the accruals within the fund. Only the USA seems to get nasty about this, however, with draconian reporting obligations and penalties for noncompliance sometimes reaching 100% of income. http://www.aca.ch/joomla/images/pdfs/agefi8.pdf

I don't, but didn't think a non-resident would be able to set up a trust in the UK. Thanks for the useful info.

Just for clarification - you say "Every child born in Britain since 1 September 2002 has a Child's Trust Fund", which sounds like it's set up automatically. However the link in your post is to an independent fund (I assume). Does this mean the child is automatically entitled to one but parents / grandparents / whoever choose which, or is there some kind of government backed one that's automatically created?

Somewhere in that link, or on a Government site if you Google "child's trust fund" you will find that each child born in or brought to Britain whose parent gets child allowance, will immediately (well, almost immediately) get a voucher for £250 that can ONLY be used to start a Child's Trust Fund. The parent is encouraged, but not required, to add to it. If the parent does not start a fund the Government automatically does so with the unused voucher.

The Children's Mutual is a cooperative, nonprofit. That doesn't necessarily mean it's the best deal but it's the one we chose. The loading charges on all the trust funds tend to be high because the accounts tend to be so small -- not every parent adds any money. But then that's not unique to CTFs -- ISAs have come under attack lately too for poor returns. The Mutual, and probably most others, gradually changes the mix of investments from shares to bonds over a child's teenage years so that by the time the child is 18 and receives the money the risk has diminished. It's a model pension funds are supposed to use but often do not.

Hi Ed,

I've just set up my daughter's trust. She was born in the UK and every child automatically gets the right to receive £250 from the government and if you are in a low income is £500. Later, at the age of 7, the child receives another "250 from the government. The parents then need to fill a form and sent it to the child trust org (within 3 months of the birth) and then receives a cheque for £250 which then the parent chooses which fund (cash or shares) they want to invest in and with which bank.

In the UK I bank with Abbey (now Santander) and they use a 3rd party to take care of child trust funds, here is the link: http://www.familyinvestments.co.uk/p...y.aspx?story=3

These funds are heavily regulated, so most of them take a very conservative approach and there are many rules in place to protect the money of the child, so in all honesty I think you'll find that they are practically all the same. The link I put here is one of the largest funds for this purpose. After a lot of looking around I realised they are practically all the same, so I stopped looking to hard and just went with the one my bank recommended.

I was able to open the account even though I have now moved to the UK because she was granted that money at birth and I or any friend or family can contribute up to £1200 a year on the account (the accounting year of each account ends 1 day before the birth date of the child).

Today I received all the documents by post, including some cards to give family and friends who would like to contribute and the contributions can be done either by direct debit, online or by phone, so you would have no problems contributing to the account if you live abroad.

If you need some more info PM me and good luck, it is a nice thing you are doing for her

Off the subject and a bit of a grunt:

What a stupid government idea this was; the cost of administering the money etc etc. I gather it was set up for jobs for the boys in London. What is £250 going to be worth in 18 years time with bank interest rates at 0.5% or the costs of managing a fund of £250. In 18 years time , the child will more than likely use the fund to top up his mobile phone.
Surely the government could have used the money for education for people to study relevant sensible courses as opposed to studying The Soaps or The Beckhams.

Birth in the UK is not a criterion, rather eligibility for child allowances. Once that eligibility ceases, typically because of removal from Britain (but otherwise because a parent becomes a diplomat, member of Visiting Forces, etc.) the trust fund eligibility remains. The further payment of £250 at 7 years of age is likewise based on the child allowance roster. As, for that matter, is the issuance of a national insurance number at age 16.

One can argue about the politics of this, but like so much of modern Britain it seems to have been modelled in a sense after the American sec. 529 tax-free college savings plans. The UK Government has for some time been trying to make university more costly. While at the same time, unfortunately, diminishing its quality and its value.

I checked for info on the UK's child trust fund and it states the fund can only be opened if your child was born between 1 September 2002 and 2 January 2011

http://www.direct.gov.uk/en/MoneyTax...Fund/DG_193690

Does anyone know what the changes are for children born after 2 Jan 2011?

And what is the equivalent for children born and residing in Switzerland?

The Child Trust Fund was scrapped by the current government, so no more payments are being made. So thats the change. It no longer exists. But there is a link on the same directgov page about Junior ISAs. So that appears to be the 'replacement'. Funded only by the person opening the account, not with any government donation.

Not aware of any such schemes for children born and residing in CH, I think there are none, but am happy to be corrected!!

I am not aware of a CH equivalent as such, but the standard Jugendsparkonto ( youth savings account) can be set up for a child and even pays a little interest. The account is then made available to the child when he or she reaches 18 i believe.
For larger amounts or for the possibility of placing non-cash assets into a savings structure, i would go for something more sophisticated like a Trust.