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Old 21.02.2020, 17:23
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pillar3 for kids?

is it possible to open a pillar3 account for kids?, to start growing a pension pot for them or perhaps a pot they could use later to buy a house. If so, are there any tax benefits to doing so?
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Old 21.02.2020, 17:30
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Re: pillar3 for kids?

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is it possible to open a pillar3 account for kids?, to start growing a pension pot for them or perhaps a pot they could use later to buy a house. If so, are there any tax benefits to doing so?
They don't have any income which is taxed, so can't possibly get any tax relief.
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Old 01.02.2021, 19:01
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Re: pillar3 for kids?

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They don't have any income which is taxed, so can't possibly get any tax relief.
In principle though, regardless of lack of tax relief, is it possible to open a p3 account for kids ?
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Old 01.02.2021, 19:04
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Re: pillar3 for kids?

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In principle though, regardless of lack of tax relief, is it possible to open a p3 account for kids ?
No. You need income subject to AHV.

This was the reason given to me why my wife couldn't invest in 3a (she earned some UK income from employment whilst on maternity leave living in Switzerland).
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Old 01.02.2021, 19:12
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Re: pillar3 for kids?

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They don't have any income which is taxed, so can't possibly get any tax relief.
But the earnings on a pillar 3 is tax free, so if you could open a pillar 3 for kids it is a way increasing investments that are tax free.... But, as you have said in other posts, there are better investments than a pillar 3.
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Old 01.02.2021, 19:26
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Re: pillar3 for kids?

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is it possible to open a pillar3 account for kids?
Technically and legally? Yes. Because any saving account is a pillar 3 account . However, a tax preferred pillar 3a is not possible as one must have an income subject to AHV/OASI. Only pillar 3a is "tax free" (it is tax deferred, as you have to pay tax once you cash it out). The non tax preferred part of pillar 3, the money in your saving account, the jewels in your safe, the classic car collection, all your real estate, the money under your mattress, and all your stocks and fund is pillar 3b.

Kids only have to pay AHV starting from the year they turn 18. This will also be their first own tax year as well.
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Old 01.02.2021, 20:46
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Re: pillar3 for kids?

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In principle though, regardless of lack of tax relief, is it possible to open a p3 account for kids ?
No and it would be silly. Those accounts give hardly any interest and once in, your money is stuck. There is not much benefit aside from the tax relief. Best thing is to either invest the money, put it in a roboadvisor or put on an account that gives at least some interest. We have a mix, account is with Banca del Canton Ticino because it was the only one that still gave some sort of interest (1% up to 50K) without need for adults to have their accounts with them etc.

UBS gives you a nice plushy and hardly any interest so don't bother.
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Old 01.02.2021, 21:43
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Re: pillar3 for kids?

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No and it would be silly. Those accounts give hardly any interest and once in, your money is stuck. There is not much benefit aside from the tax relief. Best thing is to either invest the money, put it in a roboadvisor or put on an account that gives at least some interest. We have a mix, account is with Banca del Canton Ticino because it was the only one that still gave some sort of interest (1% up to 50K) without need for adults to have their accounts with them etc.

UBS gives you a nice plushy and hardly any interest so don't bother.
But you can invest in equities in pillar 3a (up to 99% with finpension).
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Old 01.02.2021, 22:17
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Re: pillar3 for kids?

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But you can invest in equities in pillar 3a (up to 99% with finpension).
Yes but I would still not do it for a kids account!
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Old 01.02.2021, 23:14
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Re: pillar3 for kids?

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Yes but I would still not do it for a kids account!
With their extremely long term investment horizon (especially in a pension!) you'd be mad not to. All of my daughters savings are in Scottish Mortgage. She's up over 100% in her investing career and she's still hasn't been weened,
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Old 01.02.2021, 23:25
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Re: pillar3 for kids?

It all depends:
- for children younger than 18 year, it is not possible (and makes no tax sense) to pay into a Pillar 3a account. It is only possible to pay in to the extent a person earns a salary which is subject to AHV. Also, a Pillar 3a is not tax-exempt. It is merely tax-deferred (and then gets taxed at a reduced rate when one withdraws it).
- If you want to provide a nest-egg for your child with reduced tax burden, you would need to focus on investments which focus on increase in value (and do not pay out dividends). Capital gains are tax free.
- for children older than 18 years who are earning money, you could in theory help them pay into a Pillar 3a account (more details here: https://www.helvetia.com/ch/web/de/u...saeule-3a.html).
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Old 02.02.2021, 11:46
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Re: pillar3 for kids?

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Yes but I would still not do it for a kids account!
Actually for a kids account you should do it more so than for anyone else's!
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Old 02.02.2021, 13:28
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Re: pillar3 for kids?

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Actually for a kids account you should do it more so than for anyone else's!
I just would not do an account like the third pillar which is difficult to cash in! Not talking about the investment bit. It's the fact that cashing it in is limited.
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Old 03.02.2021, 11:24
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Re: pillar3 for kids?

No 3. Pillar, but I have opened an account for my kids with Avadis, who invest the funds into equities. The accounts are in their name with myself as the custodian, with them becoming the sole accounts owners once they turn 18.
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Old 08.02.2021, 12:22
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Re: pillar3 for kids?

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is it possible to open a pillar3 account for kids?, to start growing a pension pot for them or perhaps a pot they could use later to buy a house. If so, are there any tax benefits to doing so?
My answer isn't related to 3a, I opened an investment account though Yova (its called Yova kids) for our baby born last year. you have to open a main account for yourself to be be able to open a Yova kids account. The money is invested in stocks about 30 to 40 companies and you can cash it out anytime. the fees info is on their website. But if you are good at investing , then you can invest using a online broker instead of using Yova as fees would be much lower.

FAQ: https://help.yova.ch/hc/en-us/articl...this-possible-

Fees: https://yova.ch/en/fees/
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Old 08.02.2021, 12:27
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Re: pillar3 for kids?

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My answer isn't related to 3a, I opened an investment account though Yova (its called Yova kids) for our baby born last year. you have to open a main account for yourself to be be able to open a Yova kids account. The money is invested in stocks about 30 to 40 companies and you can cash it out anytime. the fees info is on their website. But if you are good at investing , then you can invest using a online broker instead of using Yova as fees would be much lower.

FAQ: https://help.yova.ch/hc/en-us/articl...this-possible-

Fees: https://yova.ch/en/fees/
Yova is a bit more interesting than the standard robo-advisers who just charge extortionate fees to make bog standard investments. Ultimately they are buying pretty select stocks - so the annual fee of c. 1% is more again to a regular active investment account (inc platform charges).
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