JISAs a popular choice for many

With intergenerational wealth planning high on many families’ agendas, the popularity of Junior ISAs (JISA) continues to increase, as nearly 15% more plans were subscribed to in the 2017/18 tax year, when compared with the previous tax year – a significant increase for a product that has been around for almost eight years. The flexibility of the JISA to fit into financial plans may be attributable to some of this growth, as families look for different ways to cascade wealth down the generations.

NITTY GRITTY

An individual with parental responsibility for a child under 18 can set up a JISA. However, a huge positive is that anyone can pay into the JISA, including parents, grandparents and godparents, as long as the child’s annual allowance of £4,368 (2019-20 tax year) is not exceeded. Grandparents making larger contributions to multiple JISAs need, in particular, to know that these are likely to be deemed potentially exempt transfers with Inheritance Tax implications.

Just like other types of ISA, if the subscription is not fully utilised in a tax year, there is no opportunity to carry forward unused subscriptions. With gains and income from investments and savings exempt from Income Tax and Capital Gains Tax, it’s good news all round.

In normal circumstances, savings and investments held in a JISA cannot be accessed until the child reaches 18.