A Uniting Ethical Enhanced Cash Trust can be an effective way to save for your child’s future expenses or for older family members to develop a sense of saving amongst younger members of their immediate or extended family. You may also consider opening an account in the name of a grandchild, a niece, a nephew or even a family friend.
There are two options you need to consider if you are opening a Uniting Ethical Enhanced Cash Trust account for a child:
Option 1 – In Trust For
You can set up an In Trust For account for the purpose of investing funds for a child.
The account is opened in the name of the investor (parent) and the child's name is placed In Trust For.
Withdrawals from In Trust For accounts are made payable to the investor, not the person the money is held in Trust For.
The investor must include their own Tax File Number, and the investor is the registered signatory on the account.
Parent(s), grandparent(s) or relatives can open an In Trust For account on behalf of a child.
Option 2 - Child Accounts
You can open an account in the name of the child.
Withdrawals are made payable to the child. If the child is under the age of 16 (and total income earned by the child is less than $420 per year) you can claim a Child Tax Exemption and you do not need to give your Tax File Number.
The parent(s) / guardian(s), grandparent(s) or a relative can be the registered signatory on the account.