Junior ISA
Why a Junior ISA?
Fund the cost of university or simply give your child a financial head start
Same tax benefits as a standard Cash ISA or Stocks & Shares ISA
Anyone can contribute (parent, grandparents, extended family and friends)
Open a Junior ISA with an initial investment of just £50
The True Potential Junior ISA is available to all clients of True Potential financial advisory services and investment advisory services, as well as through over 700 directly authorised firms we work with.
With our Junior ISA, you benefit from our award-winning Wealth Platform technology that allows you to:
Invest in a world-class range of funds, including our exclusive Wealth Strategy Fund Range, plus
- Set a goal for your Junior ISA
- Track your Junior ISA towards your goal on a personal client site
- Monitor your Junior ISA via our iOS and Android apps
- Top up your Junior ISA from £1 on-the-go with impulseSave®
- Invest from just £50
- Contact your financial adviser directly via secure message
In addition, we’ve kept charges low so that you have the potential for greater returns. With our Junior ISA, you pay:
- No initial charge for the tax wrapper
- No annual charge for the tax wrapper
- No dealing charges
- No penalties for withdrawals
How Does a Junior ISA Work?
A Junior ISA is similar to a regular ISA in that it protects the investment from income and capital gains tax. You can also transfer money between Cash and Stocks & Shares Junior ISAs. A child can only hold one Cash Junior ISA and one Stocks & Shares Junior ISA.
Where Junior ISAs differ is who owns the investment. Decisions on where to invest contributions are made by the child’s parents, but the money is held in the child’s name. Management of the Junior ISA passes to the child when they reach 16.
The money is locked away until the child reaches 18 and no withdrawals are permitted before this point (except for terminal illness or death). At 18 years, the Junior ISA is rolled into a regular ISA automatically. Once a Junior ISA is opened, anyone can contribute.
How Will I Be taxed?
Any investment returns received will be largely tax-free, although the tax credit on dividend income received by the fund is not recoverable. Cash and fixed interest funds are deemed to receive interest rather than dividends and a 20% credit is recoverable within the fund. There is no personal tax on any income taken and no capital gains tax on any gains made.
What If I Have a Child Trust Fund?
Child Trust Funds, which were available for children born between 1 September 2002 and 2 January 2011, were similar to Junior ISAs. However, due to a lack of competition and the popularity of Junior ISAs, Child Trust Funds often have unreasonably high fees.
The parent that set up the Child Trust Fund can transfer it to a Junior ISA without losing the tax-free status of the money or using up the annual allowance.
If you are thinking of transferring a Child Trust Fund, check the charges you may have to pay first and speak to a financial adviser if you need help.
Your capital is at risk. Investments can fluctuate in value and you may not get back the amount you invest. Past performance is not a guide to future performance. Tax rules can change at any time.
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN No. 527444. www.fca.org.uk Registered in England and Wales as a Limited Liability Partnership No. OC356027.
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