I read with interest your advice on buying shares for grandchildren. Is it possible to buy, say, 3 shares as you suggest in my name but put all of my 6 grandchildren in as designated owners? Or is this too complicated and I should set up 6 separate accounts?
A: The answer is “not really”:
- for practical reasons, CHESS will have a character limitation on the size of the account designation field – don’t quote me on whether it is 30, 45 or 90 characters – I am 99% confident you won’t be able to get 6 names in there;
- it is starting to look complicated – authorities would probably expect to see a formal trust, with its own TFN.
You could of course establish a formal trust with the grandchildren as beneficiaries.
I am a believer in trying to encourage an interest in investment – and I think this is more likely to happen if your grand-children get to experience individual share ownership. Setting up 6 separate accounts takes a little more work, incurs higher transaction costs and may not allow you to build a diversified portfolio – however, I think it may prove in the long term to be more beneficial.
Regards
