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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 27th Jul 11, 4:30 PM
    • 2,324Posts
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    Former MSE Helen
    MSE NEWS: Junior Isa limit to be 3,600
    • #1
    • 27th Jul 11, 4:30 PM
    MSE NEWS: Junior Isa limit to be 3,600 27th Jul 11 at 4:30 PM
    This is the discussion thread for the following MSE News Story:

    "New regulations have today been laid down in Parliament for the accounts that begin in November ..."

    Read the full story:
    Junior Isa limit to be 3,600


Page 1
    • photome
    • By photome 27th Jul 11, 4:46 PM
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    photome
    • #2
    • 27th Jul 11, 4:46 PM
    • #2
    • 27th Jul 11, 4:46 PM
    The article says the junior ISA wont be taxed ? I didnt think ISAs were taxed anyway.

    My 16 year old son is looking for somewhere to put some money and had settled on the santander ISA at 2.8% above bank rate for a year, (so 3.3% interset).

    Is that the best option for him or is he even allowed to? If he is then what is the point of a junior ISA
    • Aegis
    • By Aegis 27th Jul 11, 4:57 PM
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    Aegis
    • #3
    • 27th Jul 11, 4:57 PM
    • #3
    • 27th Jul 11, 4:57 PM
    The article says the junior ISA wont be taxed ? I didnt think ISAs were taxed anyway.

    My 16 year old son is looking for somewhere to put some money and had settled on the santander ISA at 2.8% above bank rate for a year, (so 3.3% interset).

    Is that the best option for him or is he even allowed to? If he is then what is the point of a junior ISA
    Originally posted by photome
    Junior ISAs are the replacement for Child Trust Funds, so they're for parents (and others) to invest in on behalf of minors who otherwise can't usually have investment accounts in their own names.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
    • skylight
    • By skylight 27th Jul 11, 5:00 PM
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    skylight
    • #4
    • 27th Jul 11, 5:00 PM
    • #4
    • 27th Jul 11, 5:00 PM
    I assume that in the Junior Isa's the money cannot be removed once in??



    Lets hope they allow the CTFs to be transfered to Junior Isa's too. Hopefully a far better rate of return!
  • jamesd
    • #5
    • 27th Jul 11, 6:49 PM
    • #5
    • 27th Jul 11, 6:49 PM
    A 16 year old can use a cash ISA but not a stocks and shares ISA. Is he a tax payer?
    • photome
    • By photome 28th Jul 11, 6:10 AM
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    photome
    • #6
    • 28th Jul 11, 6:10 AM
    • #6
    • 28th Jul 11, 6:10 AM
    A 16 year old can use a cash ISA but not a stocks and shares ISA. Is he a tax payer?
    Originally posted by jamesd

    No he is going in to 6th form and no job
    • gadgetmind
    • By gadgetmind 28th Jul 11, 8:10 AM
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    gadgetmind
    • #7
    • 28th Jul 11, 8:10 AM
    • #7
    • 28th Jul 11, 8:10 AM
    I think the intention was that these work just like normal ISAs but with the lower limit. So, the restriction will be on how much you can subscribe (pay in) in any one tax year. The number of withdrawals probably won't be limited, nor the total that can be in there, but once you withdraw money, it's out. You'll probably only be able to do one cash plus one S&S per year, but it looks like you'll be able to do 100% cash rather than the 50% cash restriction you have with "grown up" ISAs.
  • BargainMad
    • #8
    • 28th Jul 11, 8:52 AM
    • #8
    • 28th Jul 11, 8:52 AM
    R.E. MSE news.....

    In March, the Government announced the limit for CTFs as 3,000 but it has today increased that in line with the junior Isa to 3,600 on 1 November (see the Junior Isa plans unveiled MSE News story).


    -

    We invested out child's 250 in a self trade silver ETF - SLV, a few years ago.

    The silver price has been going up around 80% each year and looks like it will continue to.

    Now it's worth 1500 and looking like it will double again shortly, by the time child is 18 yrs old it will be worth a hell of a lot.

    So my question is what happens when it becomes worth more than the 3,600 limit? Does it just mean the amount over the limit is not tax free any more?
    Originally posted by Reiwxib


    The limits apply to money PUT IN per tax year and so with investment gains it can go well above the investment limit and it does not matter.

    So 3,600 (the limit per year) can rise to 36,000 or 360,000 and it is not affected. It is all shielded in the ISA.


    The same applies if your 3,600 is invested in something that falls. So 3,600 can go down to nothing but the limit has been used. Of course that means that you cannot then "top up" again as the 3,600 goes on the money initially put in even if it then turns out to be invested in something worthless.
    Last edited by BargainMad; 28-07-2011 at 8:57 AM.
    • edinburgher
    • By edinburgher 28th Jul 11, 9:27 AM
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    edinburgher
    • #9
    • 28th Jul 11, 9:27 AM
    • #9
    • 28th Jul 11, 9:27 AM
    Sounds like more great news for the rich, who are pretty much the only people who will have 300/mth spare to squirrel away for their children.

    I am being glib - I know that most families will try to do best by their kids and put a bit aside for their future, but realistically it won't be anything like this much. Still, it does get around the issue of children being taxed when the income on their accounts exceeds 100/year (assuming all their savings are locked up in an ISA).
  • snmrw
    Unfair for those kids with CTFs....
    I am slightly annoyed that the children who were entitled CTFs are not allowed to have junior ISAs. I have specifically not invested in the CTF for the past year as I knew that ISAs would be introduced. Furthermore, how is it that ISAs are allowed an annual limit of 3600, but CTF are only allowed 1200? The CTFs have management charges that go with them, which ISAs do not...I think this is very unfair so hope that the government let us transfer CTF money into an ISA.

    Anyone know of any good kid savings accounts? Looks like for the time being, I will have to open one of those instead!
    • chazzee
    • By chazzee 28th Jul 11, 10:27 AM
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    chazzee
    My only two concerns would be:

    1. The money is locked in until 18. Therefore it can't be used to support the child up to that age.

    2. The child can do as they wish with the balance and the parents have no control.

    I guess you need to weigh up wether it's worth sacrificing the tax free element for some control. In reality, it's only the income tax that's an issue here (parental gifts which yield over 200. in income per year - 100. per parent). The way I look at this is if I decided to invest in growth OEICs which yield little or no income (which is probably what i'd look to invest in within the ISA wrapper anyway), then it's very unlikely the child would exceed the CGT limit, and even then you could realise a gain for a given year if required.
    Last edited by chazzee; 28-07-2011 at 10:41 AM.
    Reformed Saver!
  • BargainMad
    So the Junior ISAs still have the same attribute as CTFs - money cannot be withdrawn until the 18th birthday and then it all goes to the 18 year old.

    But as CTFs were restricted to 1,200 a year (a third of the new Junior ISA) the potential fund is now quite massive for those investing the full amount for 18 years.

    Assuming 18 years of returns they could be looking at 100,000 quite easily, especially as the 3,600 limit will increase, even in bog standard cash Junior ISAs

    And yes the investment level in CTFs is being raised to 3,600 per year as well.

    And just to be sure, Junior Stocks and Shares ISAs will have charges applied (just like their CTF equivalents)......it is only the cash versions of each type that have no management fees.
    Last edited by BargainMad; 28-07-2011 at 6:18 PM.
    • gadgetmind
    • By gadgetmind 29th Jul 11, 7:06 AM
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    gadgetmind
    Sounds like more great news for the rich, who are pretty much the only people who will have 300/mth spare to squirrel away for their children.
    Originally posted by edinburgher
    The 3600 is the upper limit. If you have less to save then save less!
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