The fact you are looking for, or already receiving advice from us would indicate that a career in financial planning is not for you. We’ve designed our resource centre so that you can dip into subjects or linger on those that interest you most. Nothing beats personal advice in our view but we hope you find the information available here useful.
All UK resident children under the age of 18 who do not have a Child Trust Fund (CTF) are eligible for JISAs. This includes children born before the launch of the CTF (the CTF was available to children born between 1st September 2002 and 2nd January 2011). Anyone with parental responsibility for an eligible child can open a JISA for that child. Eligible children will be able to open JISAs for themselves from age 16.
Any income or capital gains will be tax-free. Any investment returns received will be largely tax free. The parental settlement rules do not apply to parental contributions to JISAs.
All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change.
JISAs became available from 1st November 2011 and both Cash and Stocks and Shares JISAs are available. Children can hold up to one Cash and one Stocks and Shares JISA at a time (two accounts in total). The qualifying investments for both cash and stocks and shares JISAs are the same as for the adult equivalents: i.e.
• Stocks and Shares – individual shares/bonds or pooled investments such as Open-Ended Investment Companies, Unit Trusts, Investment Trusts or life assurance investments.
• Cash – usually containing a bank or building society savings account.
The overall contribution limit is £4,368 for the tax year 2019/20 and this can be split between Cash and Stocks and Shares in any proportion. The contribution limit is usually indexed annually by CPI.
Unlike ‘adult’ ISAs where the investor can open and subscribe to new ISAs in each tax year, a child can only hold up to two JISAs (no more than one of each type at any one time – although between ages 16 and 18 they can hold one of each type of JISA plus an ‘adult’ Cash ISA).
However, previous years’ JISA subscriptions can be transferred in whole or in part, subject to the child not having 2 accounts of the same type at the end of the transfer process. Current years’ JISA subscriptions must be transferred in full. This means that part transfers of JISA investments can only be made to a JISA of a different type (cash or stocks and shares). A transfer from a Cash JISA to another Cash JISA or a Stocks and Shares JISA to another Stocks and Shares JISA must involve the transfer of the entire contents of the ‘old’ JISA. The end result must mean that the child still has no more than one of each type of JISA.
Any person or organisation can contribute to a child’s JISA.
Savings in Child Trust Funds (CTF) can also be transferred to Junior ISAs.
Withdrawals and Control
Accounts are owned by the child and withdrawals are not normally allowed until the child turns 18. The JISA effectively becomes an adult ISA at age 18 but will not affect the normal entitlement to ISAs.
A person with parental responsibility manages the child’s JISA until age 16. This person is known as the ‘registered contact’. Children will have the right to manage their accounts from age 16.