Junior Cash Isa & Adult Cash Isa at same time

weeshus

The HMRC web site states: "Children aged 16 and 17 can open their own Junior Cash ISA as well as an Adult Cash Isa" One would assume from this that one could fund both!! Many websites (including MSE) quite clearly agree that this anomaly means that in the 2016/2017 tax year a child can save up to a combined total of £19,320 (in cash) tax-free, As my grandson has a fully funded Junior Cash Isa in the 2016/2017 tax year. he went to open an Adult Cash Isa at the Halifax (where his Junior Cash ISA is)

He was told that he could not do this as his Junior Cash Isa was fully funded. I then called the Halifax Savings Helpline to speak to one of their experts in savings. The upshot of a most unsatisfactory phone call was after my insisting that they were wrong and quoting HMRC etc I was told by the Halifax expert that "Well yes he can open a Junior and an Adult ISA in the same tax year, but he can only fund one of them at a year"
This is like saying "Well he has a fully funded Junior Cash ISA , why doesn't he open an Adult Cash ISA and do nothing with it?

The HMRC website states that 16 & 17year olds can open an adult and a Junior ISA in the same year but doesn't state that there are any regulations (other than the ISA Limits) on if or how they can be funded in the same year only that they can be opened. Does anyone have a definitive ruling on this matter? I don't understand why a 16 & 17 year old Junior Cash ISA holder would open an Adult Cash ISA if he/she is not allowed to fund it whilst they have a fully subscribed Junior Cash ISA?
I am sorry that this is a long post - but I just can not believe the Halifax. Are we all wrong and the Halixa right?
Please help
Thanks & Regards - weeshus

isasmurf

The ISA guidance notes for managers says

22.5 Subscriptions between ages 16 and 18

22.5.1 When a child reaches age 16 they can apply for an ‘adult’ cash ISA which they can subscribe to in addition to any subscriptions made to their JISA(s). Holding both a cash JISA and an ‘adult’ cash ISA does not breach the JISA rule that the child can only have one JISA account of each type, and the subscription limits for all ‘adult’ ISA products apply independently of whether or not a child holds, or has held, a JISA in the relevant year.

Therefore, in the tax year in which the child turns 16 they can subscribe up to the JISA limit, and from their 16th birthday they can, in addition, subscribe up the overall ‘adult’ ISA limit to a cash ISA.

xylophone

From Nationwide FAQ (and I think that we can be assured that there are no special HMRC privileges for Nationwide......:))

http://www.nationwide.co.uk/support/support-articles/terms-and-conditions/junior-isa-terms-and-conditions

A child can only hold one Junior cash ISA at any one time. From the age of 16 until age 18 the child can also hold a cash ISA and make payments into both Junior ISA and ISA accounts up to the relevant annual allowances set bv HM Revenue & Customs (HMRC).

One thing to note if a parent is giving the child the money to invest in the Adult Cash ISA.......

http://www.moneywise.co.uk/saving-banking/savings-cash-isas/can-my-16-year-old-set-different-types-isas-the-same-tax-year

If you are giving your son the cash to save, you should be aware that there may be a tax liability to you on the interest earned on any money given to him, until he reaches the age of 18.This even applies to cash put into an adult cash Isa (but not a Junior Isa).

Reaper

If Halifax are being unhelpful I suggest opening the adult ISA elsewhere. That solves the problem.

weeshus

To isasmurf, xylophone and Reaper,
Not sure if my thanks to you were processed, so thankyou isasmurf for your direction to the HMRC website and document - great stuff as was xylophones reference to Nationwides Terms and Conditions. Reaper you give the ultimate sanction - which I had lost sight of. Thank you all - Regards weeshus

Flobberchops

I'm disappointed but not surprised that Halifax don't know the rules of their own products. When I went to open a Junior cash ISA in addition to the Junior Investment ISA my daughter already held, a "senior" advisor insisted that both couldn't be held at the same time. When I eventually convinced her to read the intranet product information page she finally relented and admitted that she had "possibly been thinking of Child Trust Funds".