I want to start buying ETFs for my kids.
Anyone recommend a platform that doesn't charge any fees?
I've asked AI and they've listed Stockspot and Betashares Direct.
I checked out Stockspot and it looks like a managed fund rather than a platform to buy your own shares.
And the same with Betashares Direct.
Best Investment Platform for Kids to Buy Shares?
talismansa on 04/05/2026 - 09:49
Comments
So, understand the financial implications of buying these ETF (especially unearned income and tax implications) and the limits placed based on your income bracket.
It is recommended to buy these using investment bonds in your childs name instead. Its almost like a 'wrapper' on top of the ETF. Owning stuff on the aussie market like VAS or VHY (income focused) is then logical as opposed to VGS (capital focused).
It is recommended to use a CHESSN sponsored broker for ASX shares where reasonable like CMC Markets. You get basic control and its segregated and ATO accepts this norm. You can DCA as its free for purchases which is the goal mostly with ETF and things assuming you don't sell.
If you are using CMC markets and opening a trust under your childs name. The child, once turned 18, they will need to open their own account and do a transfer at that point.
Avoid IBKR who don't use the same thing. Just a thought.
Can you provide any pointers to investment bonds platforms that let you select the underlying investment?
I've never had much to do with these, but the tax benefits are potentially solid.They only allow you to select from their list of investments
I want to start buying ETFs for my kids
In your name or theirs?
Your TFN or theirs?
Your tax liability or theirs?Expected amount likely to exceed threshold where tax rate on minors takes a sizeable jump to stop people putting $ under their kids names?
Personally, all our funds destined for kids are under our name for
1) simplicity
2) ability to give it to them at a future date not necessarily the second they turn 18The idea is to buy it under their name so it's actually theirs.
I understand that when opening the account, I am liable for the tax, but I'm planning on growth ETFs only, so very little if any dividends.I'm thought it would be easier if it's under their name so when it gets transferred to them when they're 18, there won't be any tax implications.
Can you elaborate why it's simpler to have it under the parent's name?
I understand that when opening the account, I am liable for the tax
Then transferring to them in the future is a CGT event anyway. Having it in their name has no benefit if you aren't also applying any tax liabilities to their own TFN as well.
Can you elaborate why it's simpler to have it under the parent's name?
A few, including
As the intended increasing balance would put the dividends from dhhf etc into CGT penalty territory for child accounts.
Don't necessarily want it automatically become theirs at the age of 18 regardless of life events and their ability to use the funds wisely
Them not actively knowing the $ values and therefore assuming they have some windfall coming rather than growing up and earning their own $ before being gifted such funds.Uhh… ATO says different:
https://www.ato.gov.au/individuals-and-families/investments-…Sara buys shares for her child, Michael, with money given to him for his birthday. Sara holds the shares for the benefit of Michael with the share broker until he turns 18. No formal trust deed has been created. Sara quotes Michael's TFN when she buys the shares.
All dividends have been reinvested through a dividend reinvestment plan.
The dividends are declared in Michael's tax returns.
When Michael turns 18 years old, the shares will be transferred to him through an off-market transfer. As he remains the beneficial owner of the shares, there will be no capital gain or loss for either Sara or Michael on the transfer.
Sara quotes Michael's TFN when she buys the shares
Shows clearly that if you declare it for the child, it's against the child's TFN and their tax return each year.
If you are liable for the tax, it's your TFN , and therefore your example on the ATO site isn't comparable
@talismansa: Did you get the advice you needed? I've been though this a few times, and always decided there is no great solution. edit: Income tax is a weath destroyer for kid's income, CGT is in any case, but if owned by you, it gets triggered when you transfer to the no-longer-child.
I considered buying gold, but it needs to be shipped or stored, and if stored, in kid's name might not be possible??Bottom line is, PPOR and super are best investments. I decided best thing I can do if build my own wealth then be generous in the future.
Like you said, getting the child a TFN and owning the shares even now avoids the CG event when they turn 18. But the income tax on a child is horrendus, so if you do recieve any dividends you've might as well consider that it's all going to the tax office. (Dividend reinvestments are still dividends.)
If you're happy to choose Betashare ETFs, then you should look into what thier platform offers. They are very good. I buy A200 and BGBL for my super through them. Don't worry about "they aren't CHESS sponsored". If Betashares fail, the ETF no less worthless in CHESS than in thier own platform.
ps. I don't know how they're child product works (whether in child's name), or whether a child can setup a "normal" account in thier own name.
But I don't believe you need to choose a managed fund. you can buy the same ETFs you'd get through any other broker, but the good thing is they let you buy partial quantities. So you can deposit $1000 and get $1000 worth of the ETF, even if that is 4.365 units.pps. sorry… last edit: friend76 below says CMC allows a trust for child where transfers at 18 without CGT issue. CMC is great, allowing from $1000 investments. I would have gone with CMC but had trouble with thier automated account setup, and their service desk wasn't flexible enough to get my issue sorted so I gave up on them. But worth a shot imo… but with income tax and CGT, you're better off paying off PPOR and giving your kid a bedroom, or putting it in your super and slipping them some cash when you retire.
Best long term ETF is GOLD!
Thats Global X Physical Gold Structured ETF.No income to report and will return massive capital gains over the next 5 years as inflation and money printing keeps rising along with out of control global debt.
Its the only way to protect your kid's wealth in REAL TERMS because gold is real money.
Paper currencies are fake money (aka Fiat currencies) because governments can print bank notes out of thin air making them more and more worthless!
Just look at what you dollar buys today compared with 10 years ago! Its almost worthless!
You can see this in how property prices have gone up, like other hard assets.
Actually they havent gone up at all. The value of your dollars has gone down down down.Get it yet?Central banks around the world know this and are dumping US treasuries and accumulating gold instead faster than ever - Especially China!
I find Commsec great, especially for ETFs, and commission is very reasonable indeed.
Just open a Commonwealth Direct Investment Bank Account (CDIA) and have the money there on the settlement date.
The fees using CDIA are significantly lower compared with taking settlement money from an external bank account!
And Dont short change yourself with crappy platforms that doesn't charge any fees.
Nothing is for free!
They always get thier money one way or another.
Too many tax implications with this. Keep it simple.
Can you elaborate?
Yes
FFS
I use CMC with a Minor Trust Account
Free to invest up to $1,000 per day in pretty much all EFTs and Shares
Once the kids turn 18, the shares can be transferred to them with no capital gains tax consequences
I do have to consider the tax implications of any dividends, given that they don't have tax file numbersI do have to consider the tax implications of any dividends, given that they don't have tax file numbers
If you haven't applied for TFN for your kids, and you're declaring and paying the tax each year on any dividends etc, you likely want to clarify what the legal tax requirements are when they turn 18.
From everything Ive read, that's a CGT event as you being the one whose TFN/tax liability has been accounted against those shares makes you the legal/benefitting owner.
If you are using the Minor account, basically you transfer the assets to your kid tax free. Its an accepted norm. No CGT event as they weren't really yours to begin with.
However, you will pay for unearned income like dividends from a tax POV. Which is where having a company or investment bonds help as the max tax there is 30%.
If you are using the Minor account, basically you transfer the assets to your kid tax free. Its an accepted norm. No CGT event as they weren't really yours to begin with
but only if the kids TFN is also declared against that account?
as per the ATO link the OP posted earlier. Its on a cgt free event if their TFN was also the one that ongoing earnings were allocated against
https://www.ozbargain.com.au/comment/17550138/redir
I think a Vanguard kids account is what you need. I believe you declare any dividends under your tfn until they are 18 and then transfers to them without gct.
https://www.vanguard.com.au/personal/invest-with-us/investin…I looked into this and just decided to invest myself with betashares ETFS. It stops that forced transfer when they are 18 and let's me control if / when they can use it. They have crazy low management fees too!
I believe you declare any dividends under your tfn until they are 18 and then transfers to them without gct.
what do you base this belief on?
What are you doing with dividends? I know as soon as you benefit from a dividend, the ATO considers the investment is yours, and there will be a CG event when you transfer.
IIRC the Vanguard doco beats around the bush on the topic, and won't commit that the ATO considers thier product a legit child's investment (i.e. no CG on transfer).
I have some ETFs in Vanguard, but they aren't as cheap, nor the platform as friendly, as Betashares Direct.
oof that income tax on kids.
The income take on kids is criminal in Australia but those wealthy enough with a Trust get away with murder
The beta shares direct kids account does what you want I believe. It has managed fund options available but it is not a managed fund. Importantly for you, ETFs can be purchased for free, it supports fractional shares and dollar cost averaging. The $0 brokerage is on all ETFs trades on the ASX, not just Beta Shares ETFs.
https://www.betashares.com.au/direct/account-types/kids-acco…
There is a lot of information on this page that it is important to understand especially around taxation.open a self managed super fund with yourself as trustee
using the low income top up scheme to double your investment
https://www.ozbargain.com.au/node/903573how does it help the kid? Also why bother opening one of these? Just the actual cost of maintenance is like 3k?
Superhero allows you to open a kids trading account in their name. I have them for my kids.
Start here: https://passiveinvestingaustralia.com/
And if it is for your kids, consider capital gains tax consequences when you transfer them once they reach adulthood. You might want to hold them in Trust.