Converting CTF to JISA (and then adding court funds)

877cms

Hopefully the title has not put too many people off this post!

My son has a Child Trust Fund which I would like to convert to a Junior ISA to get a better rate, and so I can move it around easily in the future.

Also, he has a good amount in court funds from an injury claim, which is held by the Court and earning a measly 0.5% or so.

Would this be the best way of going about things:

• Transfer CTF to Nationwide JISA (Nationwide would handle the transfer)
• Request Court to release £xxx to the JISA account

Would I end up paying tax etc.. on this?

I'm a 40% tax payer but my son has no income.

Would appreciate any advice.
Chris

colsten

You can convert a CTF to a JISA any time you like. You can add new money up to the annual allowance to the JISA, £4,080 in the current tax year. Whether some or all of the additional annual contribution could come from the money held for your son by the Court depends on the terms under which the money is held. You should ask the Court for a conclusive answer.

You would not be liable for tax that is held in your child's CTF or JISA. Neither would your child, as these are tax-free accounts.

877cms

colsten wrote: »

You can convert a CTF to a JISA any time you like. You can add new money up to the annual allowance to the JISA, £4,080 in the current tax year. Whether some or all of the additional annual contribution could come from the money held for your son by the Court depends on the terms under which the money is held. You should ask the Court for a conclusive answer.

You would not be liable for tax that is held in your child's CTF or JISA. Neither would your child, as these are tax-free accounts.

HI colsten thanks for the reply. Yes I will be making an appointment with the courts tomorrow to ask the question.

I just spoke with someone at Nationwide who was helpful, he said it would be best to get the court to transfer the maximum £4'080 to the CTF, then when it has cleared get the CTF transferred to a Nationwide JISA. What do you reckon?
Thanks again

colsten

Good point. I had forgotten about that. There is an anomaly in the system as you can deposit £4,080 into the CTF, then transfer it to a JISA, and then deposit another £4,080 into the JISA this year.

This only works once as you won't be allowed to open a JISA unless you transfer the CTF into it.

877cms

colsten wrote: »

Good point. I had forgotten about that. There is an anomaly in the system as you can deposit £4,080 into the CTF, then transfer it to a JISA, and then deposit another £4,080 into the JISA this year.

Wow that is quite a flaw, sounds like a good option to me.

colsten wrote: »

This only works once as you won't be allowed to open a JISA unless you transfer the CTF into it.

This is because you can't have a CTF and JISA at the same time?

Thanks for your great advice!!!!

colsten

877cms wrote: »

This is because you can't have a CTF and JISA at the same time?

That's right, you can't. https://www.gov.uk/junior-individual-savings-accounts/overview

877cms

Thanks for your help, much appreciated!!