Junior ISA

Zorillo

All of which supposed I'd actually do it, rather than hypothetically exploring how the transition of account might go from parents to son in the worst possible circumstances, which is all I'm really doing.

xylophone

You are just going to have to make up your mind about any gifts to your son and hope for the best.

Personal gifts to him from friends and relations are his absolutely and should be held in an account in his name.

You might consider the cash element of a JISA for these?

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

https://www.gov.uk/junior-individual-savings-accounts

Zorillo

Yes, the intention is for him to have 'some money' in his own bank account for the normal purposes of growing up, learning to save, and spend etc. Whether that needs to be in an ISA or not is a debate for another day.

The invested money will be for his future as an adult.

All of the money is his and will always be held in his own name, regardless of whether I've given it to him or others have.

Which brings me onto another question, the money he has. 'saved' already is in an ordinary children's saving account. In order to get to an investment JISA it will presumably need to pass fleetingly through a (our) current account? Does it then become a gift from his parents regardless of the original source?

We're not wealthy so here's no actual tax implication either way, I'm just curious.

cloud_dog

These types of questions pop up quite regularly and there some example of how people manage it.

Zorillo wrote: »

Yes, the intention is for him to have 'some money' in his own bank account for the normal purposes of growing up, learning to save, and spend etc. Whether that needs to be in an ISA or not is a debate for another day.

Our set up is:

1. S&S CTF (forerunner to JISA) - Contributed at start, no longer contributing; it is big enough
2. Savings/current account - in DD name. Any small gifts etc (birthday/Xmas), plus any money earned.
3. Savings account - in DD name / bare trust. We deposit money in to. DD is not aware of it but it is her money (come 18).
4. Investment Acc. - in wife's name (for benefit of DD). This is where most of the money is and I manage it from a CGT perspective.
5. Very recently started a small monthly investment (in an IT) which is designated to either go in to a LISA or a pension (after age 18).

Zorillo wrote: »

Which brings me onto another question, the money he has. 'saved' already is in an ordinary children's saving account. In order to get to an investment JISA it will presumably need to pass fleetingly through a (our) current account? Does it then become a gift from his parents regardless of the original source?

We're not wealthy so here's no actual tax implication either way, I'm just curious.

There is an annual JISA allowance but, otherwise there isn't any tax implications for putting all the money through your account and then in to the JISA.

If you were putting all the money in to a normal savings account then, depending on the amounts involved (and over the years), I would keep records as to where the money came from as there is a £100 interest limit on children's account for money deposited from parents.

Zorillo

Thanks Cloud Dog, much appreciated.

The initial investment will be in a JISA, I think. If it gets "big enough" as you put it, there will be plenty of time for a contingency plan as we grow.

xylophone

Which brings me onto another question, the money he has. 'saved' already is in an ordinary children's saving account.

Will the provider either provide a cheque in your child's name or (easier) make a direct transfer to your child's JISA?

Zorillo

Small gifts currently go via my current account into his, and large ones (will) go into the JISA directly, I hope.

His regular income is his child benefit being passed on to his bank account, but I don't think we can persuade HMRC to give it to him directly.

MallyGirl

Our set up is:

1. Cash JISA - started as S&S in my name but transferred value to DD when I wanted to use my ISA allowance for myself.
2. Savings/current account - in DD name. Any small gifts etc (birthday/Xmas). Pocket money & clothes allowance go in there via SO.
3. Savings account plus a couple of Regular Savers - in DD name. We deposit 'Child benefit' equiv in. DD is aware of there being 'a secret account' for her but has no idea how much is in any of them. It is her money (come 18) which is in 2 years time.
4. When she turns 16 next month the basic savings account will no longer be open to her so we will use that to fund the first 2 years of a HTB ISA. Even if she doesn't keep it for the house purchase/bonus the interest rate is decent for cash holding. She could transfer to a LISA at 18 if she wanted to - we will have taught her about the options so that she can make an informed choice then.

We have a sensible child with uni aspirations so I have no expectation that she will want to blow it all - although it would fund a nice gap year if she didn't get in first time round.
Also her cousin (4 years older) got a good amount on his 18th - he bought a car but no insurance and got caught driving it while stoned. He lost his licence and job - she knows about that and has no intention of following in his less than admirable footsteps.

cloud_dog

Our DD has been used to being able to 'buy' things since about 3 years old. She used to get the 1p and 2p coins and have a little purse and when we were in a shop and she wanted a chocolate bar (or something) we would ask her for 2p (or similar) from her purse. She would hand it over and have her chocolate bar (whatever).

In older years, we are talking 6, 7 or 8, it is amazing the things kids think they want until they have to cough up something for it. This saved us no end of hassle in shops.

MallyGirl

Linking DD's debit card to her Amazon account (for kindle) instead of charging everything to mine meant her taste switched quite quickly to 'free teen fiction' from whatever I had been paying out for!