• Children's accounts and investments

    Accounts and investments held by children

    A different threshold applies to investments held by children under 16 years of age. Where a child under 16 years of age has an investment in their own name which earns income of less than $420 a year – that is, $35 a month – they are not affected by the TFN rules. However, they must notify their investment body of their date of birth to prevent an amount from being withheld from their investment income.

    The $420 threshold applies to children until the end of the calendar year in which they turn 16 years of age. After that, they need to decide whether to quote their TFN. A child who does not have a TFN can apply for one at any time.

    The $420 threshold does not apply where a child under 16 years of age receives dividends from a public company – there is no threshold for income received from these investments.

    Accounts and investments held by a trustee for children

    The $420 threshold does not apply to investments held by a trustee for children.

    An investment account held by a trustee for a child with a bank, building society or credit union, which earns income of $120 or more a year, will have an amount withheld where a TFN is not quoted. The trust TFN should be quoted.

    If there is no trust TFN, the trustee's personal TFN should be quoted – for example, where the investment is held by an adult for a child, the adult is the trustee.

    Last modified: 16 Mar 2015QC 16808