Bare Trust for children

[2liamhop]

Our eldest son (2 yrs) has a Bare Trust set up from a recent inheritance. Our newborn son (6 mths) has nothing at the moment.

Can I add him to the Bare Trust, or will he need his own Bare Trust (the Bare Trust is a simple account in my name with his initials as a designation)?

If he has to have his own Bare Trust (which I imagine is the case), how can I even the amounts in each Trust? Can I transfer cash from one trust to the other? Or would I have to persuade Grandad to gift some money to #2 son?

I like the idea of a Bare Trust as they can make use of their own tax allowances, etc.

Any help/suggestions much appreciated.

Thanks

LH

[section 44]

If the 6mth old were to be added to the existing trust then there would, in effect, be value passing from your 2yr old son to the 6mth old son - why would the 2yr old (or any trustee acting on his behalf) do this? An answer might be to add further property to the trust so that there is no loss of value by the 2yr old son.

[2liamhop]

Thanks s44. I guess an answer would be to add further property to the original trust, or even to a new trust for #2.

Unfortunately, as a parent, I can't add to the trust without being taxed on any income/capital in the future. Even more unfortunate is that no other relatives have sufficient spare cash to gift to the trust either.

It looks like #2 son will have to wait to see if

a) he gets his own inheritance to level the playing fields
b) he grows up bigger than his brother and 'persuades' him to split the money when he reaches 18

[maths]

It appears that on setting up the bare trust the duties and the powers of the trustees were not set out in any deed.

It is thus not possible to add anyone else to the existing bare trust; the original gift was for the benefit of the two year old exclusively (ie absolutely).

A separate bare trust is required for the new-born.