TAXES
of children in Child Trust Funds –
between £250 and £500 in vouchers,
depending on income.
If you did not use the voucher
sent to you by the time it expired,
it was automatically invested for
you. It may be one of the more than
700,000 dormant Child Trust Funds
– if you don’t know who your child’s
account is held with, check the
HMRC website to find out.
Another major difference is
that JISAs are more flexible – you
can hold a cash JISA, a stocks and
shares JISA, or both. However, with
a Child Trust Fund, you have to
choose between one of three types –
stakeholder (where the money has
to be put in a number of different
investment types and charges are
capped at 1.5 per cent a year), cash,
or stocks and shares.
Child Trust Funds were available
to children born between 1
September 2002 and 2 January 2011.
Your child is eligible for a JISA if
they were born on or after 3 January
2011; were born before September
2002 and are still under 18; or were
born between 1 September 2002 and
3 January 2011, but didn’t qualify for
a Child Trust Fund.
Children aged 16 and 17 can open
their own JISA as well as an adult
cash ISA.
ALTHOUGH THERE ARE
MANY ADVANTAGES TO
TRANSFERRING YOUR
MONEY FROM A CHILD
TRUST FUND TO A JISA,
THIS IS NOT A DECISION
THAT SHOULD BE TAKEN
LIGHTLY
the JISA has been opened. Therefore,
you need to be sure the switch is
in the interests of your child – for
example check that charges are not
higher in the JISA you are thinking
of transferring into – and even if
they are lower, make sure this is
not just an introductory rate or
dependent on opening another
type of financial product with
that provider. You should also find
out whether the provider of the
Child Trust Fund will charge for
transferring the money out.
Once you have decided which
JISA provider you want to transfer
the Child Trust Fund into, you will
need to take the following steps:
1. Fill out a JISA transfer form,
containing your child’s details
and information about your Child
Trust Fund
2. If you are opening a stocks and
shares JISA, you will need to specify
what stocks, investment trusts or
funds you want to invest in
3. Submit this form to your chosen
JISA provider, which will carry
out the switch for you
4. The switch should take place
within 30 days and your Child
Trust Fund will be closed
automatically
You can transfer a Child Trust Fund
into Trustnet Direct’s JISA using its
normal ISA transfer form.
The platform has a page
dedicated to Junior ISAs here. It
features links to a number of readybuilt portfolios and goal-based
selections, including one that is
specifically designed to maximise
growth over the long term.
HOW TO SWITCH FROM A
CHILD TRUST FUND TO A
JISA
Although there are many
advantages to transferring your
money from a Child Trust Fund
to a JISA, this is not a decision that
should be taken lightly – you will
not be able to reverse the move once
trustnet.com
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