Selling Shares Held By A Minor/Child

If you're ready to sell the shares held by a minor or a child, then we've simplified the process into three simple steps. We have a team of experts on hand to do the administration so you can be paid out in as little as a few days.

How to Sell Shares Held by a Minor/Child

So that we can take care of the administration and heavy lifting on your behalf, we need a few things from you.

1. Fill out our online share sale form. It only takes a few minutes and includes basic information about the shareholding and the shareholders. You’ll need to have your Securityholder Reference Number (SRN)  to hand.
2. Complete an online ID check. This will be sent out to the legal guardian of the child after the form is completed.
3. Send us a certified proof of age document such as a birth certificate.

To get your document certified you’ll need one of the following people to sign, date and address a photocopied proof of age document. The accepted persons are:

• Justice of the Peace
• Commissioner of Oaths
• Solicitor
• Police Officer from the State you reside in (needs to include their Badge Number)

How Much Does it Cost to Sell Shares Held by a Minor/Child?

You’ll find that the costs associated with selling shares for a child vary, we have three service levels:

• $50 or 0.5% (lowest rate)
• $110 or 1% (Value service)
• $150 or 1.5% (Express service)

These fees are deducted from the sale proceeds, so there’s no need for upfront costs. 

How Long Does it Take?

The process of selling shares held by a minor doesn’t take too long once you’ve got all your paperwork in order.

Express share sales are usually completed on the same day if done before 3 p.m. AEST. Value share sales take around 1-2 business days to process. After the shares are sold, the funds are transferred to the designated bank account within three business days. 

It’s important to start the process well in advance of when you need the funds, to accommodate any potential delays.

Background on Child-Owned Shares

Understanding the intricacies of child-owned shares is essential as you navigate managing your child’s investments.

Typically, these shares are bought by parents as an informal trust, with the child as the beneficial owner. Legally, a minor can’t own shares in Australia, so an adult usually holds them until the child turns 18. Any dividend income is placed in a bank account in the child's name.

Transferring these shares can incur a fee. Selling child-owned shares involves several steps, including completing various forms and identity checks. It’s important to be aware of the timing for processing and funds transfer.

Fees often depend on the service level chosen. Remember, our brokerage fee is deducted from the sale proceeds, so there are no upfront costs.

It is important to remember that non-compliance can result in penalties, so it is crucial to ensure that you have all the necessary documents and are meeting all requirements. Taking the time to properly gather and submit the required information will help prevent any potential issues down the line.

When selling shares held by a minor, any profit realised is usually subject to capital gains tax, which must be reported and paid by the child or their trustee. It's important to consult with a tax professional to navigate capital gains tax implications and ensure compliance with Australian Taxation Office (ATO) regulations.

Benefits of Selling Minor’s Shares

Selling a minor’s shares can offer you several benefits. One of these benefits is the opportunity to secure funds for your child’s future growth. This action provides a ready source of cash that you can invest in other assets, such as a college fund or a down payment for a house.

In addition to providing financial flexibility for kids, selling the shares can help you manage your child’s financial portfolio more effectively. If the shares aren’t performing well, or if there are better investment opportunities available, selling can help you maximise returns.

Selling these shares may eliminate potential income tax liabilities for your child. However, it’s crucial to understand any legal restrictions and evaluate how this move affects your child’s long-term financial goals. Consulting professional advice is always a smart step.

Frequently Asked Questions

How Can The Sale Of Shares Impact A Child’s Financial Learning And Understanding Of Money Management?

Selling shares can be a valuable lesson for your child in financial management. They’ll learn about market fluctuations, the concept of investments and the importance of informed decision-making. It’s a practical introduction to economics.

Are There Any Ethical Considerations When Selling Shares Held By A Minor?

Yes, there are ethical considerations. You must ensure the sale is in the minor’s best interest, not just financially but considering future needs. It’s crucial to obtain proper consent and avoid any exploitation or conflict of interest.

Can Selling Shares Affect A Minor’s Eligibility For Scholarships Or Financial Aid In The Future?

Yes, selling shares can impact a minor’s eligibility for financial aid. Assets, including shares, might affect the Expected Family Contribution calculation, which determines need-based aid. Always consult a financial advisor for specifics.

What Are Some Effective Ways To Explain The Process And Implications Of Selling Shares To A Minor?

To explain the process and implications of selling shares to a minor, you’d break it down in simple terms. Discuss how shares represent company ownership and how selling them means trading ownership for money.