Family costs
Investing for a child
Why this matters. A child’s investment income can be taxed at the minor rates, which are different from adult rates. Wages the child earns are a different category. The page uses the tax-office minor rates.
The same money, held four ways. The tax line is what the ATO charges on a child’s investment income. Nothing here is a product to buy.
Parent’s name
$583ATO minor rates
Tax on this year’s earnings
The parent owns it and is taxed at the rate you typed. The parent controls it.
Informal trust (ITF)
$544ATO minor rates
Tax on this year’s earnings
Often the child’s account, with a parent running it until 18. Investment income can be taxed at the child’s penalty rates.
Investment bond
$372ATO minor rates
Tax on this year’s earnings
A rough 30% tax inside the bond. This is not a product, and not a suggestion to open one.
Discretionary trust
$544ATO minor rates
Tax on this year’s earnings
If the trust pays the income to a child, the same penalty rates can apply. The trust decides who gets the money.
A child’s investment income: nothing on the first $416, then 66 cents in the dollar up to $1,307, then 45% of the whole amount. ATO — children’s share investments ↗
Next: Income tax calculator — The parent column uses the same income-tax idea.
What doctors often miss
Eligible unearned income of a minor is taxed at nil up to $416, then the higher minor rates. Wages are excepted income and are not in that calculation.
Included / Not included
Included
Not included
- Excepted income (work, a testamentary trust)
- Your tax rate on money you invest in your own name
- Super for a child
- Brokerage, fund fees and inflation
Assumptions you can edit are the inputs on this page. This is a model, not a prediction, a tax assessment, or a recommendation.
A rough figure — not advice. Terms
Also
Advertisement — labelled, never inside the number.