Advanced search

Investing for children

(4 Posts)
Spagbolagain Sun 11-Mar-12 09:02:09

Am a bit confused about junior ISAs and what best to do. DC1 has a CTF which we pay into each month. DC2 could get a junior ISA. Ideally would like them to have the same setup but obviously DC1 cannot have the ISA and DC2 cannot have a CTF.

Is the junior ISA the only way we can do stock and share investments for them? Could I not get the same product but not as an ISA and just sign a tax exemption thing like you do with a bank account. Thus it's not ISA but still tax free.
I don't want to do an ISA in my name and give to them later in case we want to use our own allowance.

CogitoErgoSometimes Sun 11-Mar-12 16:52:44

You can buy unit trusts on behalf of children. I've regularly contributed to this one for DS who was born pre CTF scheme. It's in his name and will mature when he's 18. The tax due on investment trusts or unit trusts is Capital Gains Tax on the increase in value. The thresholds are pretty high .. he'd have to make >£10,000 profit on the investments before CGT applied. Be aware, however, that Unit Trusts and similar stock-market investments are risky in that the value can go down as well as up. Management fees are also charged.

If you started a Junior Cash ISA it would be in his name and you'd still maintain your full personal ISA allowance. Cash ISAs are a relatively safe option

LittleWhiteMice Tue 27-Mar-12 11:36:50

is there any point to an isa for a child though?

childrens accounts arent taxed anyway and as long as you put your name as the guardian or whatever you still have control?

im looking at child isas too, im looking at everyhitn at the moment

CogitoErgoSometimes Wed 28-Mar-12 08:43:35

There are few tax advantages to a children's Cash ISA because children's savings can be set up as tax-free as long as the interest earned is below a certain amount. However, some of the interest rates offered are better than ordinary savings accounts available to under 16's. A Junior ISA is the product that has been introduced to replace the Child Trust Fund scheme i.e. a managed fund. These often outperform cash deposits over the long-term and, with inflation eating up any interest earned at the moment, is something to consider if contributions are going to build up & be left alone for up to 18 years.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now