My children are 16 and 13, and I set up in-trust share accounts for them both through Bell Direct. However, I’ve just learnt that 50 per cent of their returns have been withheld as tax. Each child has less than $5000 invested. Neither of my children has a tax file number, and I didn’t provide my own. I suspect this might be the cause of the issue. Have I made a serious mistake, or is it something that can be easily fixed by supplying my tax file number to Computershare?

The 47 per cent withholding happens automatically to certain investment income when no tax file number (TFN) is recorded – the bank, share registry or investment fund must deduct the top marginal tax rate until a valid TFN is provided. Small amounts of investment income may be exempt from the withholding provisions.

Is the tax office taking a bite out of your kids’ hard-earned savings?Credit: Simon Letch

For anyone aged under 16, there is no requirement for “no TFN withholding”. If the investment accounts are “in trust for” your children, you can supply your TFN as you are the legal owner of the investments. That will stop the withholding tax immediately. However, your children can also apply for their own TFNs, which is straightforward.

Children under 15 are unable to apply for a tax file number online – you can complete the online form, then take your child’s identity documents to an Australia Post or Services Australia outlet for verification (you can also post the documents with a paper form). If they’re over 15, they can apply themselves online, using their myID account linked to the ATO.

I’m 80 and have been a widow for three months. We had a self-managed super fund (SMSF) and we were both trustees. What are my legal obligations........

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