Children are a blessing in any family – and you can both help them and use them as part of your family wealth plan. So how can you use your children or grandchildren in your wealth plan and how can you help them to have a better financial future? This blog article is all about ways to use your children or grandchildren in your family’s tax planning – and please also see our companion article about helping your children to have a wealthy future: https://www.jvca.co.uk/how-to-make-your-kids-or-grandkids-millionaires/
If you run a business then there are ways in which you can include your children in the remuneration planning or tax planning. This is about ways in which you can use your business to pay money or provide benefits to your children. These are all useful options to think about – as part of an overall plan for you, your business and your family.
1 Children’s Wages
In the UK the legal age at when children can be employed and paid a wage is age 13. There are a number of rules that need to be followed, but this is a straightforward thing to organise.
2 Children’s pensions
If a child is an employee, then the company can include them within their pension arrangements. Legally the employer doesn’t have to until they reach the age threshold for auto enrolment pensions. However you don’t need to wait and there is scope for the individual or the employer or both to pay pension contributions.
3 Children’s phones
If a child is an employee, then the company can provide them with benefits in kind. Probably the most useful one is to give them is a company phone, but there will also be other benefits that can be taken advantage of, like bicycles.
4 Children’s dividends
Not every business can organise to pay dividends to their children but, for those that do, it provides a useful add-on to the remuneration and tax efficiency plan. If you are thinking about this option then I urge caution. This is not straightforward to get right and there is a specific bit of tax avoidance to be aware of.
Are you intrigued by any of these points? Get in touch and ask us about what it would mean for you or to just get it sorted!