If shares in a private company are gifted to a minor grandchild to be held in bare trust such that dividends can be received by a minor and utilise their personal allowance and £2k dividend allowance and utilised to pay school fees, how does this work in practice as to documenting and tax returns?
- Does the grandparent act as trustee and open a bank account in trust for the grandchild and arrange to pay the school fees from the dividends received and to submit a tax return for the grandchild each year? How do you register online and get a UTR for a child?
- Is a gift-holdover election made under s165 TCGA ? who signs for the minor child, their parent or the same grandparent that is trustee and donor of the shares?
- Are any other practical aspects to look out for?
Meston Reid & Co