ISAS - Junior ISAs

What is a Junior ISA

• A Junior ISA is a tax efficient savings vehicle, that lets you invest up to £3,600 each tax year for the benefit of a child

• All cash and investments held in a Junior ISA belong to the child

• The Account is held in the name of the child, but all investment decisions or instructions are given by a ‘registered contact’

• The ‘registered contact’ for a Junior ISA is usually the parent or an adult who has parental responsibility for the child account holder

• Withdrawals are not permitted until the child is 18

• There is no capital gains tax liability within a Junior ISA and there is no further tax to pay on dividends

• There is no need to declare any gains or income received in the Junior ISA to HMRC

• The annual limit will rise in line with the consumer prices index from April 2013


Who can apply for a Junior ISA

Saving for a child


You can open a Junior ISA if you are a UK resident aged 16 or over and wish to save for the benefit of a child resident in the UK. You must be the child’s parent or legal guardian.


Saving for yourself


You can open a Junior ISA if you are a UK resident aged 16 or over but have not yet reached your 18th birthday.
 

A Junior ISA cannot be opened for a child who was eligible for a Child Trust Fund. Children eligible for a Junior ISA are as follows:
 

• Born before 1 September 2002 and aged under 18
 

• Born between 1 September 2002 and 3 January 2011 who didn’t qualify for a Child Trust Fund for any reason
 

• Born on or after 3 January 2011

Withdrawals from a Junior ISA

• No withdrawals until the child is 18


• Withdrawals are permitted in the event of ill health (terminal illness) or death of the child

Alliance Trust Savings JISA launch offer

No annual charge


From 1 November 2011 to 31 December 2011 - all new Junior ISA applications will have the annual administration charge waived until 1 August 2012.

Unique 100% fund provider rebates


Full fund manager rebates consistently add real value to your account, year upon year.

 Our standard annual administration fee is £25+VAT. Past performance is not a guide to future performance. All investments carry an element of risk, which may differ significantly and if you are unsure as to the suitability of any particular investment or product, yo u should seek professional financial advice. This content is based on our understanding, as at November 2011, of current taxation, legislation and HM Revenue & Customs practice, all of which are liable to change without notice. The impact of taxation (and any tax reliefs) available to your child depends on their individual circumstances. Charges may be subject to change in the future.

 

This ‘How to’ guide is produced by Shares Magazine and is only for general information and use, and is not intended to address particular requirements.

The value of investments and the income derived from them can go down as well as up. Past performance is not necessarily a guide to future performance.

 

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