Our Bitesize Tax Planning provides you with details of the key allowances and reliefs available to you. The tax planning tips are available in easy to consider sections.
This article looks at Junior Individual Savings Accounts (JISA).
- A cash JISA – you will not pay tax on interest on the cash you save
- A stocks and shares JISA – your cash is invested, and you will not pay tax on any capital growth or dividends/interest you receive
The account must be opened by the child’s parent or guardian. However, relatives and friends can also contribute to your child’s Junior ISA, as long as the £9,000 limit for 2021/22 is not breached. Some of the best cash JISAs pay a rate up to 2.4% . So it is worth encouraging grandparents and other family members to contribute to your child’s JISA. In doing so, the grandparent is moving money out of their estate for IHT purposes, which could be exempt if certain conditions are met.
Savings in a JISA account cannot be withdrawn until the child reaches 18. Any child owning a Child Trust Fund (CTF) can’t hold a JISA. If you want to open a Junior ISA ask the provider to transfer the CTF into it.
For more information or to discuss any of the issues raised in this article, please contact your adviser, or call us directly on 0161 819 1131. Further information can also be found at https://www.gov.uk/junior-individual-savings-accounts
See the other topics in our Bitesize Tax Planning series:
Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.
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