Junior ISAs available soon
September 28th, 2011
Originally announced towards the end of 2010, Junior ISA accounts are now expected to become available from 1 November 2011. The Junior ISA will be available for any UK-resident child (under the age of 18) born on or after 3 January 2011, or those born before that date who were not eligible for a Child Trust Fund (CTF).
The Key features of a Junior ISA are:
• They can now receive contributions up to a maximum of £3,600 per tax year (when originally announced the limit was £3,000)
• Can be taken out by parents or guardians (on behalf of a minor child) or by a child aged 16 or over
• There are a choice of cash or stocks and shares accounts – each child will be able to have one cash and one stocks and shares account at any one time (within the total overall maximum contribution limit)
• Tax efficient income and gains
Although, unlike the old CTF, there will be no Government contributions to the Junior ISA these accounts still represent an excellent opportunity to save tax efficiently on behalf of a child. As with Child Trust Funds, Junior ISA accounts are owned by the child although they are not able to access the account until they are 18
Of course, Junior ISAs are not the only way to save tax efficiently for children and therefore professional financial advice is essential.
In addition, Junior ISA accounts will be provided by a range of institutions from high street banks & building societies, investment fund managers, friendly societies, and stockbroking services – It is therefore advisable to seek guidance from your Financial Adviser if you are thinking of opening an account for a child or grandchild to ensure that you make the right choice.
The value of your investment can go down as well as up and you may not get back the full amount invested
Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor