Saving for your Children’s Future.

If you are looking to pass some money to your children or grandchildren there are a number of things you can consider.

Some options are

1. Set up a Junior ISA (JISA) which a parent or guardian will manage and contribute to the account but only the child can access the money – and only after they turn 18.

2. Everyone has an tax free gift allowance of £3,000 per annum (you can carry forward an unused one from the previous tax year)

3. Consider setting up Trusts. ( we will cover this off in a further blog)

4. Regular payments from your taxed income: You can also give a child or grandchild money by regularly contributing to their living costs or expenses out of your taxed income. But for the child or grandchild not to pay tax on the gifts, the pattern of giving must be consistent – such as monthly gifts to pay a child’s rent or a grandparent paying school fees – not sporadic. Additionally, the money needs to be from your surplus income. You must be able to prove to HMRC that gifting the money doesn’t affect your standard of living. This is to ensure people don’t hand money over to their children to avoid it being taxed.

So what is a Junior ISA…

A Junior ISA (JISA), or child’s ISA, is a tax-efficient savings account which allows you to gift a tax-free lump sum to your child as soon as they turn 18. It allows you to save for their future without paying income tax or Capital Gains tax on the returns.

Junior ISAs can be set up by a parent or guardian to help their child fund any future ambitions. Whether it’s their first car, to go towards a house deposit or to help fund their university education, they’re an efficient method of saving over the long-term.

The Junior ISA allowance is £9,000 for the current tax year, but tax rules may change in the future. This is the maximum total amount that can be deposited into a Junior ISA in each tax year (6 April to 5 April).

A child can only hold one stocks and shares Junior ISA each tax year, but they can also hold a cash Junior ISA. The Junior ISA allowance can be spread across both types of plan, as long as you do not exceed the overall allowance. For example, if you saved £6,000 into a stocks and shares Junior ISA, then you would be able to save another £3,000 into a cash Junior ISA.

A Junior ISA can only be opened by a child’s parent or legal guardian. Once the Junior ISA has been opened, family and friends can contribute to the child’s future savings goals. This can be done through one-off top-ups or a monthly Direct Debit from just £10, making it a popular way to make cash gifts on

If you want to discuss options to gifting to children or grandchildren then please contact us on 01904 623888, or email us at contactus@yorwealth.co.uk

Trusts and Taxation are not regulated by the Financial Conduct Authority. The value of your investments (and any income from them) can go down as well as up.

Information contained in this Guide does not constitute advice and decisions should not be made based solely on the information in this Guide. Individual advice should be sought.

YorWealth Ltd is an appointed representative of Hexagon Wealth Limited which is authorised and regulated by the Financial Conduct Authority (FCA no.483403). The firm is registered in England and Wales No. 12938859 and its registered office is Studio 7, Forest Farm Business Park, Fulford, York, YO19 4RH.

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