Childrens savings advice

DaniArrowsmith

Hi, I currently have 2 savings accounts for my daughter. One is her CTF with HSBC which has approx £800 in. The other is a smart limited access adult account with Nationwide that's in my name, it has approx £10k in it. I'd hoped to just combine the 2 into a junior ISA but can only put £9k a year in. We don't want to make any withdrawals until she's over 18 (6years). What would be the best thing to do with the money to make sure it's in her name and getting the best interest?I pay in a small amount each month to the nationwide account.
Thanks 😊

xylophone

We don't want to make any withdrawals until she's over 18 

With regard to a CTF/JISA, the child has the right to control at age 16 and access at age 18

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

With regard to the Smart account

This account is for adults looking to save for a child's future, or for a child or young person to save for themselves. The account is designed for those who will rarely need to make withdrawals.

If the account is opened by an adult, the adult will be acting on behalf of the child (as a 'bare trustee'). Although the account is in the name of the adult, the money in the account is held for and belongs to the child. As a 'bare trustee', the adult will have duties and obligations to the child (for example, the adult will need to act in the best interests of the child).

https://www.boltburdon.co.uk/yourlife/wealth-planning/trusts/bare-trust/

"What is a bare trust?

A bare trust (sometimes known as a ‘simple trust’) is one where the beneficiary, the person who benefits from the trust, has an immediate and absolute right to both the trust capital and the income received by the trust from that capital.

Someone who sets up a bare trust can be certain that the assets they set aside will go directly to the beneficiaries they intend, because, once the trust has been set up, the beneficiaries cannot be changed.

The trust assets are held in the name of a trustee (the person administering the trust), but the trustee has no discretion over what income or capital to pass on to the beneficiary or beneficiaries.

Bare trusts are commonly used to transfer assets to minors. Trustees hold the assets on trust until the beneficiary is 18 in England and Wales. At this point, beneficiaries can demand that the trustees transfer the trust fund to them."

In respect of income arising on the Smart Account (does not apply to CTF JISA), you need to be aware of the £100 rule.

https://www.which.co.uk/money/savings-and-isas/savings-accounts/childrens-savings-accounts/children-and-income-tax-ar1lz8u61109#:~:text=If%20the%20interest%20on%20the,if%20it%20were%20your%20own.

With regard to getting the £10,000 into a JISA, it would be possible to make the full contribution of £9000 to the CTF within the CTF year and then to transfer that CTF to a JISA.

Once transferred into the JISA, it would then be possible to make the full JISA contribution in the JISA tax year- in effect "double bubble" for that crossover period.

See https://forums.moneysavingexpert.com/discussion/5944775/will-moving-ctf-to-a-jisa-count-as-part-of-this-years-4260