Bare Trust - Grandchild Education Help

How can a company owned by minors generate income?

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Hi. Thank you for taking the time to read this. I am posting on behalf of a friend that isn't computer literate.

"Our grandchild is has private education fees to pay and we are hoping to help by setting up a bare trust for them. The plan is to also open a private limited company with our grandchild as the shareholder, and I will act as the director, running the company on their behalf.

The limited company will offer out our home as a venue for photoshoots and advertising campaigns. All income generate from the company will be retained and issued as dividends to our grandchild in their bare trust, which we believe can then be used for their education costs. I will not take any salary or income from this company.

Is there any issue with this? Is there a problem with a private limited company being owned entirely by a minor and me working on their behalf for free, to help them generate income? I will have no rights to any income. "

Thank you.

Replies (6)

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By williams lester accountants
26th Sep 2022 12:55

I would recommend your non computer literate friend books a face to face appointment with a local accountant to discuss further.

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Replying to williams lester accountants:
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By WhichTyler
26th Sep 2022 13:13

And with a lawyer

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paddle steamer
By DJKL
26th Sep 2022 13:00

How does said company have the legal right to offer your home for photo shoots if it does not own/lease said home?

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By WhichTyler
26th Sep 2022 13:10

Also I doubt that the minor 'has private education bills to pay' as the liability is usually with the adult that decided to send them there

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VAT
By Jason Croke
26th Sep 2022 14:08

This question is complex and requires detailed advice and this is not what AccoutingWeb is for.

Youll need a lawyer and an accountant to work together the structure this, else it will fall apart quickly leaving a mess behind.

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By armstrongbell
27th Sep 2022 13:30

It sounds to me as though the grandparent is earning money from an asset they own - earnings on which they must be taxed before they gift what is left to pay for school fees.

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