ISA's for children

Malski

Just wondering if anyone would recommend the best ISA for investing money for children? Also is it possible for myself and a few others to setup direct debits into the childrens account even though we invest into our own ISA aswell?

Just_landed

See link then click on can I have an ISA :-

http://www.hmrc.gov.uk/isa/faqs.htm

Malski

Looks like they are introducing the ISA's for children later this year.

Jonbvn

Where did you get that info from???

From HMRC wesbite linked above:
Q. Can I put money into an ISA for my child?

A. Children aged 15 or under cannot have an ISA.

Children aged 16 or 17 can have a cash ISA. This can be either a Mini cash ISA or a Maxi ISA where you only put money into the cash component. The subscription limits are the same as for savers who are over 18 (up to £5,100 in each tax year).
ISAs for 16 and 17 year-olds are primarily for those in full or part-time employment, including those still at school with, for example, Saturday jobs. But some young people will also use ISAs to save money given to them by their parents.

If you give your child money to invest in an ISA account, and the total investment income arising on all gifts from you, not just in ISAs, exceeds £100 in any tax year, all the income arising will be treated as part of your income for that tax year for Income Tax purposes. You should report that income to your Tax Office.

This rule does not prevent you from giving your child money to invest in an ISA - you just have to take care not to give your children too much. The £100 income limit for each child applies to each parent, not to both taken together.

Malski

Here, also a few banks mention it.

http://www.moneysavingexpert.com/news/banking/2010/10/childrens-isas-to-be-launched


They are bringing it in to replace the Child Trust Funds, even thoug the government won't be contributing anything towards this.

jimjames

As they haven't been launched yet or details given there is not a lot that anyone can say.

In the meantime you can always use your own ISA to save for your children.

twirlypinky

Not sure why you would want a child to have an ISA, they don't pay tax.

jimjames

twirlypinky wrote: »

Not sure why you would want a child to have an ISA, they don't pay tax.

Unfortunately that statement is incorrect on two counts.

1) Children do pay tax - they have the same allowance as everyone else but most do not earn enough to pay it.

2) If a child receives £100 a year in income from savings given by parents then it is taxed as the parents income.

So there are some very valid reasons for saving money for children in an ISA.

twirlypinky

I stand corrected, thanks.

greenface

Plus if your kids can start their ISAs up younger they will have more in Tax free savings as they enter adulthood without having to start Isas then from new

BFM

Malski wrote: »

Here, also a few banks mention it.

http://www.moneysavingexpert.com/news/banking/2010/10/childrens-isas-to-be-launched


They are bringing it in to replace the Child Trust Funds, even thoug the government won't be contributing anything towards this.

seen this comment in a few threads, what happens to money in existing CTF, will they continue to be a tax free place to invest money for my kids? will they be locked down with jsut what's in them or will i be able to continue to pay in?