Buy property for a minor with their money?

B

bistogirl

Guest
Our son and daughter, aged 7 and 9, are about to inherit 40K each from their grandmother. We are exploring how best to invest this money on their behalf and would like to establish whether it would be possible to buy a property in their name using this fund of 80K, perhaps adding to it with money we have saved for them from the Childrens' Allowance. Obviously, this amount would fund only part of the purchase and the balance would need to be funded by means of a mortgage, to be paid off with the income the property would generate.
Is it possible to take out a mortage on their behalf with us, as parents, as guarantor? Can we deal with any tax issues which might arise now, or later, in their names, so that it is clear at all times that the property is theirs (not ours)? Wold it affect their future status as potential first time buyers? Etc! Etc! Any advice or insights would be welcomed.
We are considering other investment options too but feel that we know property well, having some professional expertise in the area.
 
I don't think that property is a good idea as an investment because you lose your very valuable first time buyer status. Of course, all these rules may change in 20 years time when they are buying their homes.

I don't think that you should borrow on behalf of a child either, even if it was possible.

The best long term, most flexible investment is in a portfolio of shares. Buy them directly rather than through a unit linked fund as the dividends will be effectively tax free. I think that they can reclaim the DWT.

This will be very flexible.If they need the money for college, for a car or for a holiday, they can cash part of their fund.

brendan
 
Thanks for the advice Brendan, we're no experts on shares but will read up on previous discussions on the site to see what's involved!
 
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