A Junior ISA is a tax-free wrapper available in the UK for children under 18 - similar to a standard ISA for adults. There is no CGT or income tax payable on investment gains or dividends.
Junior ISA's
Your child must be both:
The child can take control of the account when they’re 16, but cannot withdraw the money until they turn 18.
Source: Official UK Government JISA Overview
Key Point: Click for UK Government Source:
If your child moves abroad, you can still add cash to their Junior ISA.
Does anyone have information on how such an account would be taxed upon return to Ireland? I'm aware that, in Ireland, bare trusts are the closest to this, but are still a significantly different structure. If a child turns 16 and decides to take a punt on a company facing a high risk of bankruptcy, there is absolutely nothing a parent can do. The account isn't like bare trust where the account is in a parents name with the child named as a beneficiary - it's in the childs name.
In Ireland, I believe the bare trust structure enables CGT to apply to the child, and them to avail of the annual tax-free allowance, but income tax rolls up to the parent.
Would I be correct in assuming that a JISA belonging to a child, upon return to Ireland, would be different and the income would apply to the child as opposed to the parent? If this were the case, it would reduce the administrative effort significantly because you are only obliged to submit a tax return if your taxable non-PAYE income is more than €5,000 a year. This would be in addition to the fact that there would be no liability to USC or Income tax.
If the above all holds true, it would be highly beneficial to open an account for a child, probably one with no maintenance fees like with X-O, before a child returns to Ireland. That would allow future investments within the structure of up to £9000 per year (based on the current years subscription limits) and the account can be funded by anyone (it just has to be opened by a parent).
The above assumes investment into shares directly as opposed to funds or ETF's (to which an exit tax applies and there are no allowances that I'm aware of).
Junior ISA's
Your child must be both:
- under 18
- living in the UK
The child can take control of the account when they’re 16, but cannot withdraw the money until they turn 18.
Source: Official UK Government JISA Overview
Key Point: Click for UK Government Source:
If your child moves abroad, you can still add cash to their Junior ISA.
Does anyone have information on how such an account would be taxed upon return to Ireland? I'm aware that, in Ireland, bare trusts are the closest to this, but are still a significantly different structure. If a child turns 16 and decides to take a punt on a company facing a high risk of bankruptcy, there is absolutely nothing a parent can do. The account isn't like bare trust where the account is in a parents name with the child named as a beneficiary - it's in the childs name.
In Ireland, I believe the bare trust structure enables CGT to apply to the child, and them to avail of the annual tax-free allowance, but income tax rolls up to the parent.
Would I be correct in assuming that a JISA belonging to a child, upon return to Ireland, would be different and the income would apply to the child as opposed to the parent? If this were the case, it would reduce the administrative effort significantly because you are only obliged to submit a tax return if your taxable non-PAYE income is more than €5,000 a year. This would be in addition to the fact that there would be no liability to USC or Income tax.
If the above all holds true, it would be highly beneficial to open an account for a child, probably one with no maintenance fees like with X-O, before a child returns to Ireland. That would allow future investments within the structure of up to £9000 per year (based on the current years subscription limits) and the account can be funded by anyone (it just has to be opened by a parent).
The above assumes investment into shares directly as opposed to funds or ETF's (to which an exit tax applies and there are no allowances that I'm aware of).
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