Junior ISA and Child Trust Fund

jonesehh

My 16 year old recently opened a Junior ISA and a Help to Buy ISA with savings from his grandparents. He has also got a Child Trust Fund which we have been putting money into. I was told yesterday by a family member that you can't have a Junior ISA and a Child Trust Fund at the same time. Is this true? If so, what should we do? And what would happen if we kept them open?
Thanks !!!

xylophone

16 year old recently opened a Junior ISA and a Help to Buy ISA with savings from his grandparents. He has also got a Child Trust Fund which we have been putting money into. I was told yesterday by a family member that you can't have a Junior ISA and a Child Trust Fund at the same time.

He's quite right. From the horse's mouth as it were.

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

You cannot have a Junior ISA as well as a Child Trust Fund. If you want to open a Junior ISA ask the provider to transfer the trust fund into it.

He could however have an adult ISA and a CTF/JISA.

Your son should have requested the transfer of the CTF to the JISA.

This has certain advantages - the CTF year runs birthday to birthday, the JISA year from Tax year to tax year.

Thus, a full year's contribution could be made to CTF in the CTF year, the CTF transferred and then the full subscription made to the JISA.

This can be of benefit where say a child has been given around £8/9k in a lump sum.

With regard to repairing the error, you might contact the JISA provider and ask about how to proceed.

There is official guidance available to JISA/CTF managers.

https://www.gov.uk/guidance/repair-a-junior-isa-and-manage-account-holders-subscriptions

jonesehh

Thanks, that is really helpful. So just out of interest, what would have happened if I hadn't realised this. Would we have been penalised?

rawhammered

i had this a while back when we had a £250 government voucher that was languishing untouched in a CTF forgotten about and later opened up a JISA with a separate company. When we tried to move the JISA after a couple of years the new provider discovered the CTF and sent my 7 year old a cheque for over £5k (the amount sat in the JISA on transfer). Had to open him a bank account to pay it in.

There was no penalty, they just had to close the JISA down.

Alexland

I would just get on with asking the JISA provider to transfer the CTF into the JISA. If it all happens within this tax year then I wouldn't imagine HMRC would care that new contributions to the JISA occurred slightly before the CTF was transferred.