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Injustice: Child Trust Funds
Comments
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Its PEPs/ISA all over again.
That wasn't too bad as you could just leave PEPs alone and switch to doing S&S ISAs, which is what I did. Then in (from memory) 2008, the whole lot could be combined.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
my children never had a CTF, they never had a JISA either.
They aren't disadvantaged, as I opened re:accts for them with investment trust firms and contributed to their future that way. which the OP can do if they like. and transfer to a JISA later, once any change has taken place.0 -
It all seems very unfair that just because a child is born between a certain date means that they are unable to have a JISA. The current CTF system is poor value compared to a JISA. Why waste money on a consultation when the answer seems obvious?
But it's not obvious.
CTF contribution limits are related to birth years; JISA contribution limits to tax years.
CTF tax protection expires at 18; JISA tax protection continues until death.
Some CTFs were given a £250 gift from the state.
All the consequences of a unification need to be thought about, to ensure that nothing too unfair (or politically embarassing) occurs. If the state decides upon a consultation, it's usually because the matter is non-obvious, not because the state is stupid, and you are a genius.
Warmest regards,
FAThus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...THE WAY TO WEALTH, Benjamin Franklin, 1758 AD0 -
as I opened re:accts for them with investment trust firms and contributed to their future that way.
But there are tax considerations for parents saving for their children and there are also ownership considerations?
A parent saving into a CTF/JISA knows that the money belongs to the child, that interest is tax free and that there is no further tax to pay on dividends.
A parent saving into bare trust for a child knows that the money belongs to the child but interest/dividend income on the account above £100 per annum will be taxed at the highest marginal rate of the gifting parent.
A parent saving in a designated account (not bare trust) knows that the money in the account remains his, is taxed at his highest marginal rate and remains in his estate for IHT purposes.
In addition, if the account is in his estate at death and the money is not willed to the child, then the child has no right to inherit the account.0
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