Duplicate Junior Stock and Shares Isas

rugbypark017

Hi. I have three JISAs for my children, which wer invested with the Woodward Equity Income fund, suspended in 2019. As I could not contribute any more funds, I opened a further three with AJ Bell in 2019. I now realise I shouldn’t have more than one set of them, but in seven years have never been contacted by HMRC. Should I leave things as they are or go to AJ Bell? The Woodward Fund shows no sign of finally windig up yet. Thanks.

eskbanker

Do you have the option of transferring the second JISAs from AJ Bell to the JISA provider where the Woodford fund is held? Not necessarily saying that it's the best option, but where there's any breach of the rules from funding multiple ISAs, it's generally the later product/subscription that's deemed as invalid…

xylophone

You held the Woodford fund on a platform?

If so, I don't quite follow why you could not continue to contribute to the JISAs held on that platform.

The Woodford fund was "frozen" but could you not have made investments in other funds?

rugbypark017

Not sure about the above. I’ll look into it. Do you think I’m better to inform AJ Bell/HMRC or hope it’s not been noticed?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82036841#Comment_82036841

It's a tricky one - ISA providers must submit annual returns to HMRC so the relevant information is already available to HMRC. Normally it'll be better to let sleeping dogs lie if HMRC's compliance team hasn't taken any action, but there is a higher risk with JISAs that non-compliance might be picked up many years later, when the financial consequences could be much more severe (in terms of tax on many years of investment growth).

rugbypark017

Final point (hopefully). As I understand it they’ll take off the ISA wrapper of the invalid one.

1. Will I keep the growth, but have to repay any tax due?
   
2. Will I be able to keep it running in the index fund it is invested in?
   
   
3. Will any tax due be offset against each relevant year over the last seven years of holding it, or the whole amount against my current years allowance. The total gain is around 1.5k on an investment of 3.5k in a world index tracker. Thanks.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82037021#Comment_82037021

If the funds are in your childrens' names then any tax liability would be theirs rather than yours, and if growth is only in £1.5K territory then it would fit well within annual CGT exemption anyway.

rugbypark017

https://forums.moneysavingexpert.com/discussion/comment/82037028#Comment_82037028

I understood any gains above £100 were charged against the parent. That’s what I read in the H RC rules, anyway. Maybe I’m mixing up income tax with CGT.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82037063#Comment_82037063

Yes, the £100 rule doesn't relate to CGT.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82037075#Comment_82037075

But does it apply to an ISA set up illegally?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82037307#Comment_82037307

But CGT only comes into the conversation in the first place because the later ISAs were invalid?

Edit: I may have misunderstood the question, but the £100 rule only applies to savings interest outside JISAs, so OP's investment growth isn't in scope even if the assets were to be treated as being outside the wrapper.