Children's Accounts what does it mean when they say all withdrawals must benefit the child.

papageo8

I am right in thinking you can switch between JISA's if you can get a better rate on another JISA. I will need to look into it more.

xylophone

JISA are currently earning more and I am happy for that money to be locked away until they are 16. Makes good sense does that.

The JISA cannot be accessed until the child turns 18 (at which time only the child (young adult) may access it).

The child is permitted to control the account from the age of 16.

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

xylophone

Good to know, I didn't know that. We don't currently earn that but would if we deposited a lump sum in one of these accounts.

The £100 rule.

Have a look at this (you can ignore the "interest gross" information because all interest is now paid gross).

https://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/families/babsi.htm

Be careful. There are special rules if the savings have been given by a parent. If gifts from a parent produce more than £100 gross income a year, the whole of the income from the gifts is normally taxed as that parent's income. A child cannot get back any tax on that income. Nor can interest paying accounts be registered to have interest paid without tax taken off.

The £100 rule applies separately to each parent

The £100 rule applies to income arising each year. It does not matter whether the money in the account is comprised of part capital and part added interest. The £100 rule applies as long as income is over £100 in any one year for any one child from one parent.

papageo8

@xylophone even better 18 is a more sensible age for us. I think by then they will hopefully of decided their career, uni or not, be driving age etc. This is 100% something I need to do with the regular savers now they have matured.

The £100 rule is enough to put me off doing anything with lump sums. Think it's time to move the regular monthly savers into JISA.

Thanks for all your help guys! 

I think I'll keep the other funds liquid to avoid any ambiguity later on.