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News - 5 April 2011

Junior ISAs - what are they?

The Junior ISA is a new tax efficient savings account designed for adults to save and invest on behalf of children.

The Junior ISA is a direct replacement for the Child trust Fund (CTF) but the Government will not be making a contribution towards the Junior ISA other than providing a Tax Free shelter for the investments.

They will be available from 1st November 2011 and each child will be able to hold one cash and one stocks and shares account within the annual allowance. Those children who already have a CTF will be barred from having a new Junior ISA.

The Junior ISA is covered by the Financial Services Scheme (FSCS) to ensure the investment is safe.

So as not to be disadvantaged, the upper annual limit for CTF contributions will be raised to £3,000 to match the Junior ISA. Just as with the CTF, the money held in a Junior ISA account will be locked away until the child is 18 (currently).

There are two sorts of Junior ISA available:
• A cash Junior ISA – which will earn interest like a savings account from a bank or building society
• An investment Junior ISA – which will invest in stocks and shares

You can take out both a cash Junior ISA and an investment Junior ISA, with different providers, at the same time if you choose, and unlike an adult ISA, you can stay with the same provider for the term.

A tax year runs from 6th April to 5th April.

If you need any help and advice for your business or financial planning don’t hesitate, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds.marketing@netaccountants.net

For a full list of ABDS’ News Briefings go to: www.netaccountants.net
 

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