Long term investment for 3 year old

C

clti

Guest
I am thinking about picking a Rabobank investment fund for a 3 year old. Initially only 1000 will be invested with small adhoc amounts later on. In theory it will be used when he is 18. I presume a stock market investment is better than an deposit account because of the years involved. Any comments, suggestions, or alternatives would be appreciated.
 
It sounds like a fantastic idea. If you put it into his name does the 3 year old have his own capital gains tax allowance ? I hear rabobanks methods of calculating tax on their funds will make you do a little bit of work.
 
Thanks for the reply. I do not know if he would get the CGT allowance. Also I was surprised to see Rabobanks rule that you are deemed to sell and re-buy and be liable to tax after 8 years. Is this the same for all funds or just Rabodirect?
 
I spent time searching for similar threads on kids investments and also on Rabo bank. Lots of info in these posts. The tax situation with Rabo is a bit offputting and the 8 years rule is new from a 2006 finance act. I am now changing my thinking and starting to think about buying direct shares in 1 good company every year for the next 10/15 years. I own some Glanbia, Tullow, Ryanair and RBS already. When the big college/car/etc expenses come in years to come, selling one company at a time as required should work out on average. Less costs on average and simple tax logic. As well as that open a credit union account for small amounts like gifts, etc. I must use the search facility on this site more...
 
Please note that Askaboutmoney does not allow discussion of individual shares.

There are many existing threads on saving/investment for/on behalf of children.
 
CCOVICK, Thanks for the reply. Did not know about this rule but I do now. Can you mention particular funds? or ETFs? etc in a post. Also, I made the last post to save someone the hassle of telling me to look at old posts/threads.
 
Bear in mind that Rabo's charges on their unit linked funds are not the most competitive out there - 0.75% on entry, 0.75% on exit and an annual management fee of 0.7-2.0%. You can get other funds with no charges other than an annual management fee of c. 1% for example. And with Rabo you have to deal with your tax liabilities yourself. On the other hand their online trading services is convenient but personally I don't consider it worth the additional costs compared to alternative unit linked funds providers.
 
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