International Share Purchases for Kids

Jono454 on 09/01/2025 - 11:55

I’d like to add international stocks to my kids investments. There are various brokers who offer minor trusts for domestic shares, such as comsec which I already have accounts with. However, I don’t think there is a facility to trade International shares for Australian minors. Does anyone know of a simple way to do this?

I think I’ll have to purchase them in my name and transfer to them when they’re 18. Tax implications in this scenario would be minimal as I’d only be buying small parcels for my kids.

Financial

Comments

  • jv on 09/01/2025 - 12:30
    +2

    I think I’ll have to purchase them in my name and transfer to them when they’re 18.

    That will trigger capital gains tax…

    • onetwothreefour on 09/01/2025 - 14:04

      Tax implications in this scenario would be minimal as I’d only be buying small parcels for my kids.

      • jv on 09/01/2025 - 14:06
        +7

        Can't see the point of going to the trouble of getting international shares then…

      • brad1-8tsi on 10/01/2025 - 09:35

        I guess it depends on how small the parcel is and what the OPs taxable income is at the time.

        I purchased $14850 of IVV (aus domiciled but the S&P500) in 2019 & it's now worth ~$33,250. $9200 CG after discount. Around $3k tax for a median income earner.

        For (assuming US domiciled) OP will need to W8BEN every 3 years and then faff about working out the foreign tax offset for the divs.

        There are plenty of ways to invest OS and still be AU domiciled.

    • GoldenDragon888 on 09/01/2025 - 21:00
      -1

      Not necessarily. IIRC, you as the parent hold the shares "as trustee" for a child. Whoever holds the shares pays the tax. Then just do an off market transfer when they turn 18. As the "beneficial owner" has not changed, then no capital gains tax is payable.
      I also DRP, so I am not gaining any financial benefit to muddy the who the "beneficial owner" is.

      • freefall101 on 09/01/2025 - 21:52
        +1

        If the parent is holding them for the child then the child pays tax on dividends. In Australia you need to supply the child’s TFN on purchase and any dividends need to be paid into their bank account. For an overseas account that can be a little trickier, likely setup a separate trading account specifically in trust for the child, a bank account for them and the kid pays tax on dividends.

        I would t buy foriegn shares for a kid without seeing a tax accountant first. Seems daft to do anyway, just buy ETFs with foreign exposure.

      • brad1-8tsi on 10/01/2025 - 09:36

        Off market transfer will trigger a CG event.

        • GoldenDragon888 on 10/01/2025 - 11:45

          Not if there is no change in “beneficial owner"

      • leigh8904 on 10/01/2025 - 13:08

        I think you need to be careful here; just because you bought the shares using a minor trust account for the child, does not necessarily mean the ATO will deem the child as the beneficial owner. Consider 2 scenarios (minor trust account for both):
        1. Parent submits their own TFN for the shareholding, parent declares the dividend income in tax return and pays tax on it -> parent will be deemed as the beneficial owner by the ATO. CGT event will be triggered if transferring shares to the child once they reach 18.
        2. Parent submits the child's TFN for the shareholding, child declares the dividend income in tax return and pays tax on it -> child will be deemed as the beneficial owner by the ATO. CGT event will not be triggered if transferring shares to the child once they reach 18.
        But note: the child tax free threshold for unearned income is only $416, once over this, the tax rates are quite punitive.
        https://www.ato.gov.au/tax-rates-and-codes/tax-rates-if-you-…
        https://www.ato.gov.au/individuals-and-families/investments-…
        Disclaimer: I am not a tax professional, there can also be more nuances to it than this.

    • cashless on 10/01/2025 - 06:48
      +1

      Wrong jv.
      If the shares are bought with the minor (child) as the beneficiary & the senior (parent) as the administrator, they can be transferred to the child using off-market transfer when the child turns 18 years old.
      How do I know?
      Because I did exactly the same for one of my kids.
      No CGT event triggered

      • jv on 10/01/2025 - 09:23
        -2

        that only applies if the shares were held in a trust account.

        user name checks out…

        • cashless on 10/01/2025 - 23:45

          Well call it what you like. Trust account. Administrator account. Nominated holder account. The result is the same.
          And you were wrong.

          I suggest it is time that you, and your user name both check out.

          But we love you really because you’re always so predictably predictable

  • Frosty17 on 09/01/2025 - 12:51

    Read this for starters - https://passiveinvestingaustralia.com/investing-for-children…

    You don't want to transfer the shares, it will trigger CGT. There are other (and much better) ways.
    Platforms like Pearler allows these accounts.

  • SBOB on 09/01/2025 - 13:18
    +2

    . However, I don’t think there is a facility to trade International shares for Australian minors. Does anyone know of a simple way to do this?
    I think I’ll have to purchase them in my name and transfer to them when they’re 18. Tax implications in this scenario would be minimal as I’d only be buying small parcels for my kids.

    CGT for sure, but if its only minimal values why not just buy a low dividend paying growth based ETF for the market you're after
    (eg IVV, NDQ, VGS etc etc)

    you can then both buy via a local trading option, and not have to worry about any overseas tax declaration forms, and possibly avoid a CGT transfer event.

  • Looking4Bargians on 09/01/2025 - 16:03

    How about SuperHero ?

  • mshanann on 09/01/2025 - 16:43
    +2

    Not sure what international market(s) you are thinking - but Aussie dollar has dropped against the USD - with 1 AUD buying 69c in Oct, and now just 62c.
    So more expensive now to purchase say US stock, and you run the risk if the stock doesn't make significant gains in value and the Aussie strengthens back up - then you could lose out just on currency exchange. If the stock actually falls in value and you sell, and meanwhile the Aussie dollar has strengthened, you cop it both from the stock decline as well as the forex. I guess where I'm coming from, you may want to hedge the currency risk.

    • mskeggs on 09/01/2025 - 17:10
      +3

      I think you misunderstand the way most investors work. They don't want to buy things when they are cheap and unloved, when there are no newspaper headlines talking about new highs and people getting rich.

      You're probably one of those weirdos whose ears prick up when the media says an industry is finished and yesterday's news and is hitting new lows.

  • AustriaBargain on 09/01/2025 - 17:16

    How old are your kids currently?

  • cashless on 10/01/2025 - 06:44

    I did exactly this with Selfwealth. You can buy US & HK shares

  • JimmyF on 10/01/2025 - 08:20
    -1

    I’d like to add international stocks to my kids investments

    I read this as, I want to hide money from the ATO…..

    • Duckie2hh on 10/01/2025 - 09:34

      Its so hard being the 1%.

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