By comparison, income earned on money gifted to a minor child is attributed back to a parent. That is, the income is taxable to a parent. However, capital gains are not considered income in this case, just dividends and interest from investments.
It also bears consideration, Nicholas, that gifting some of your existing investments to your son may trigger capital gains tax if you sell investments for a profit. Even if you gifted half the account to him and added his name jointly onto the existing account, deferred capital gains would be triggered. You would be considered to have sold half the investments — a deemed disposition — and this would trigger any accrued capital gains.
If you wanted to put some money in your son’s name, but maintain full control over the capital amount, you could set up a discretionary family trust. This essentially protects the money from his unimpaired access because you would be the trustee in charge of the money, and be making the investment and distribution decisions. But a trust has costs. Upfront legal fees may be $5,000 or more, and annual accounting and legal fees could be $1,000 or more.
Nigeria Nigeria Latest News, Nigeria Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: financialpost - 🏆 7. / 85 Read more »
Source: fpinvesting - 🏆 43. / 63 Read more »