MSE News: Teens can save up to £19,000 tax-free thanks to ISA loophole

Former_MSE_Helen

16 and 17-year-olds can save up to £19,000 tax-free this year under today's ISA revamp...

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Teens can save up to £19,000 tax-free thanks to ISA loophole




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DragonQ

Shame there's no teens out there with £19,000 to spare.

p00hsticks

DragonQ wrote: »

Shame there's no teens out there with £19,000 to spare.

Or any ISAs/NISAs/JISAs paying a good enough rate of interest comared to other products to make it worth doing ....

jamesd

This is wrong: "The only exception is where money is given to a child by each parent, which generates more than £100/year in interest (so £200/year for a couple)". The ore correct rule is each parent and up to £100 of interest from the gifts from that parent. The £100 allowance isn't transferable between parents and it is not necessary for "each parent" to give for the tax to be due, one parent is sufficient.

Only parents are affected by this restriction, not others.

Former_MSE_Liane

Hi jamesd,

Thanks for pointing that out - it's now been amended.

Liane

Pincher

How do they check the money comes from the child or parent?


If I was a drug dealer with lots of cash, I would recruit lots of teenagers, pay the cash in monthly, then close the JISA and NISA after a year, and transfer the money out to legitimate accounts. The teenager gets a cut, or some free drugs.

scotkiwi

MSE_Liane wrote: »

Hi jamesd,

Thanks for pointing that out - it's now been amended.

Liane

But it doesn't make it clear that money in the Jisa isn't taxed under the £100 rule, only the money in a Nisa would be if the source is a parent.

Archi_Bald

scotkiwi wrote: »

But it doesn't make it clear that money in the Jisa isn't taxed under the £100 rule, only the money in a Nisa would be if the source is a parent.

No it would not be taxed. All interest in ISAs and JISAs is tax free.

jimjames

£19k?

Paper rounds obviously pay more than when I was a lad...

gadgetmind

Some let youth be a barrier while others don't.

http://www.bbc.co.uk/news/business-28129967

I earned more during my 5th year than the teachers did and I made jolly sure that they all knew!

Speculator

jamesd wrote: »

This is wrong: "The only exception is where money is given to a child by each parent, which generates more than £100/year in interest (so £200/year for a couple)". The ore correct rule is each parent and up to £100 of interest from the gifts from that parent. The £100 allowance isn't transferable between parents and it is not necessary for "each parent" to give for the tax to be due, one parent is sufficient.

Only parents are affected by this restriction, not others.

Also, if the parent giving the money is a non taxpayer (earning less than £10,000) you are allowed keep the R85 on the childrens account even if the child is earning over £100 in interest!

I spoke to HMRC and they confirm that this is correct.