LISA for child savings

Farley_2014

Hi,
Was hoping for a bit of guidance on whether it's feasible or a good idea to use a stocks and shares LISA (set up in my name) as a savings vehicle for my son (currently 1 yo).

I recently set up a junior S+S ISA for him b as it seemed the most obvious way to create a savings pot for him that I can incrementally pay into. However a S+S LISA should generate a bigger return due to the additional 25% (max 1k) the govt contributes.

I realise I wouldn't be able to take the money out of the LISA until I am 60, but my son  would be 25 at that point which seems like a sensible age to give him the money.

Are there any tax penalties I would incur for transferring the money to him once I have withdrawn it from the LISA?

I know this isn't what the LISA has been designed to help with but I want to use whatever vehicle will generate the greatest return in the next 20-25 years.

Any advise would be welcome!
Thanks

Alexland

I am doing something similar as I already have a good pension so my S&S LISA will be used (1) to recycle into my younger wife's pension for further tax benefit until she is 60 and can continue with her LISA money until age 75, (2) to help my children onto the housing ladder in their 20s and (3) maybe buy a newish car that we can run for ages.

This approach wouldn't work for university, driving lessons, etc which they might need before I am 60 so have made sepetate investments for those too.

There is no tax on gifts but if you died soon after it may affect your inheritance tax position but the rules would have probably changed by then so it's hard to be too precise in long term planning.

Farley_2014

Really appreciate your response - good to know others are thinking along the same lines.