Chapter 7

Taxing Issues That Affect Students and Your Children

In This Chapter

arrow Taxing children’s income

arrow Distributing trust income

arrow Understanding special disability trusts

arrow Accessing a tax offset and child support payments

I t goes without saying that children can be an expensive mob to raise and maintain, particularly when it comes to schooling!

A number of anti-avoidance tax provisions stop you from distributing income to your children. You can also use a number of tax benefits to help reduce the cost of raising children. In this chapter, I examine these anti-avoidance provisions and identify the various tax benefits you can gain from supporting your children.

Raiding the Piggy Bank: Taxing Under 18s

Be careful if you want to give money to your children, because anti-avoidance provisions apply with respect to income earned by children under 18. The purpose of the provisions is to stop parents putting (or perhaps hiding) large sums of money in their children’s accounts, in order to avoid or reduce the amount of tax payable on the investment income derived. The good news is these rules ...

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