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Here are some of the more commonly asked questions about Child Accounts.
A Junior ISA can be opened for any child under the age of 18 although if a child already has a Child Trust Fund it would have to be transferred to the Junior ISA once this has been opened. A Junior ISA can also be opened in your own name from 16 to 18.
$50 (either as a one off or regular payment).
$4,260 in the 2018/19 tax year.
Normally you cannot access the funds until the child is 18 except in the case of death or terminal illness.
There is no tax to pay on income or investment growth inside a Junior ISA. (Apart from a tax of 10% on any dividend payments on UK shares. This is taken off before the dividend is paid and can’t be reclaimed.)
From the age of 16 a child could open their own Junior ISA, provided they were resident in the UK. A child can only have one Junior ISA, but this can be transferred between different providers if you like.
Any child under the age of 18, as long as their parent or guardian has earnings that count for UK income tax or is resident in the UK at some point during the tax year.
$50 (either as a one off or regular payment).
$3,600 in the 2018/19 tax year. Including tax relief.
A parent or guardian aged 18 or over must open a Child SIPP, but after that anyone can pay in.
The child. They will gain control of the investments when they reach the age of 18 but, based on current tax and pension rules, won’t be able to access them until they are aged at least 57.
In theory, more than one pension can be opened for a child, but no more than $3,600 can be paid in across all of them in any one tax year.
Any UK resident adult aged 18 or over can open a First Steps Account to invest for a child.
$50 (either as a one off or regular payment).
There’s no maximum.
Anyone can. You don’t have to be the parent or guardian of a child to open a First Steps Account either. Or any relation to them at all.
The adult who opens the Account. You can think of our First Steps Account as a way to hold and track the investments you are making for a child separately from those you are making for yourself.
There are no tax advantages. And because the investments belong to the Account holder, if they die the First Steps Account will form part of their estate and the child won’t have any direct claim on them.
There are no limits to how many First Steps Accounts can be open for the same child. And up to four adults can be joint holders on one Account.
When the child reaches 18 you don’t have to transfer the Account into their name. You are completely in control. But we change it into a regular Investment Dealing Account at that point, which means the Account fees will change to $10 a month.
Please remember investments can go down as well as up. You may get back less than you originally invested.
If you are unsure as to the suitability of any particular investment or product, you should seek professional financial advice. We can’t give you financial advice.
Tax rules may change in the future and taxation will depend on your personal circumstances. Charges may be subject to change in the future.