66% is the maximum tax rate rate children may pay on investment earnings.

More specifically:

$0-$416 income = No Tax

$417-$1307 = 66% Tax

$Over $1307 = 45% Tax

Below are some strategies that might help minimise this tax:

*Invest through an investment bond/insurance bond.

*Establish a discretionary family trust whereby most earnings go to the adults until the child becomes eligible for the adult tax-free threshold.

*Have your grandparents, or yourself establish a Testamentary Trust provision within the will (but unfortunately this means someone will have to pass away for your child to inherit the money).

*Have your child start a job to qualify for a higher adult tax free threshold (there are rules around this).

*Invest in capital gains investments (preferably no income yield) and defer selling till the child becomes eligible for the adult tax free threshold.

This information is not personal advice that you should act upon, please consult a professional.