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Junior ISA
MBA MBA
Posted: 11 January 2022 05:43:57(UTC)
#11

Joined: 16/12/2012(UTC)
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Has anyone simply opened an investment account in the child’s name and presumably then they have a CGT allowance and dividend allowance that can be used thereby enjoying the benefits of a JISA without tying the money up. Or is that not allowed by HMRC?
countrymum
Posted: 11 January 2022 07:05:32(UTC)
#12

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MBA MBA;202626 wrote:
Has anyone simply opened an investment account in the child’s name and presumably then they have a CGT allowance and dividend allowance that can be used thereby enjoying the benefits of a JISA without tying the money up. Or is that not allowed by HMRC?

Pretty sure kids can't have a GIA in their own names - for my kids I had to open the GIAs in my name and they are named beneficiaries (Bear trust). Then I transfer out the JISA limit each year as I'd rather the money was firmly within their own names, and believe it's better for them to build up their non-taxable pot via the JISA.
4 users thanked countrymum for this post.
Keith Cobby on 11/01/2022(UTC), Tim D on 11/01/2022(UTC), MBA MBA on 11/01/2022(UTC), Newbie on 11/01/2022(UTC)
Keith Cobby
Posted: 11 January 2022 07:30:33(UTC)
#13

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countrymum;202631 wrote:
MBA MBA;202626 wrote:
Has anyone simply opened an investment account in the child’s name and presumably then they have a CGT allowance and dividend allowance that can be used thereby enjoying the benefits of a JISA without tying the money up. Or is that not allowed by HMRC?

Pretty sure kids can't have a GIA in their own names - for my kids I had to open the GIAs in my name and they are named beneficiaries (Bear trust). Then I transfer out the JISA limit each year as I'd rather the money was firmly within their own names, and believe it's better for them to build up their non-taxable pot via the JISA.


Completely agree. My son has his CTF and I have a GIA in my name for him. At 18 the CTF will convert to an adult ISA and I will transfer the GIA into his ISA over several years. The sooner they learn about money management and investing, the better.
2 users thanked Keith Cobby for this post.
countrymum on 11/01/2022(UTC), MBA MBA on 11/01/2022(UTC)
MBA MBA
Posted: 11 January 2022 09:43:55(UTC)
#14

Joined: 16/12/2012(UTC)
Posts: 1,725

So children dont have a CGT allowance like they have an income tax allowance
Keith Cobby
Posted: 11 January 2022 11:33:30(UTC)
#15

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Children have a CGT allowance but, as with adults, it is cheaper and simpler to hold childrens' investments in a tax wrapper. I also have set up a junior SIPP for my son.
MBA MBA
Posted: 11 January 2022 11:47:02(UTC)
#16

Joined: 16/12/2012(UTC)
Posts: 1,725

ah i didnt realise children have their own CGT allowance as well. Will look into that. a key challenge when making such decisions is people like me who have some cash but dont quite know whether we will need the cash between now and the next 20 years for the child or indeed other things (paying mortgage if something goes wrong) so its not just about denying access to the money for the child when they hit 18. unless you've got the mortgage paid for and things like school fees (if they arise) its tricky to lock away significant sums of money for most people even if well above the median household income/wealth
Keith Cobby
Posted: 11 January 2022 12:09:32(UTC)
#17

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I have friends who are investing for their children in their own accounts, but will the children ever see the money? I prefer my son to have his own money which cannot be touched by me whatever my financial circumstances, the money is completely ringfenced. My attitude may be partly due to the knowledge that when he reached 18, my wife and I would be on the cusp of retirement and wanted to make separate provision for his potential university and housing costs.
countrymum
Posted: 11 January 2022 19:10:13(UTC)
#18

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Keith Cobby;202671 wrote:
I prefer my son to have his own money which cannot be touched by me whatever my financial circumstances, the money is completely ringfenced.

Same here, although I guess my circumstances are different in that the money has already been gifted to my kids, so is absolutely theirs. Which probably explains why I dislike the GIAs so much, as they put the money back under my name, and I'm always worried someone will wrongly attribute that money to me, when its absolutely not mine, it's the kids' completely.

But I can see the difference, and why people address things differently, between money that has already been given to the children (and is theirs), and money that is being saved with the view that it would be nice to give to the kids at some point provided it's not required for other family costs in the meantime.
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