It’s Tuesday!
Let’s talk Tax.
Read this week’s short Tax snippet for doctors & dentists, to help you save money and get more organised with your tax affairs. It’s just to give you a flavour – tax 5 minutes out of your evening to have a read.
Save for your children’s future
Last week we discussed utilising your ISA allowance to minimise tax paid on savings interest.
This week, we look at the children’s equivalent of the ISA – the Junior ISA (JISA).
Utiisling your child or children’s JISA limit can be a great way to save for their future, tax efficiently.
Like an ISA, the interest income earned in a JISA is tax-free, up to the annual threshold, which for 16/17 is £4,080.
Also like the ISA, a JISA can be a cash investment or a stocks & shares investment, or a combination of both.
Stocks & shares ISA’s and JISA’s typically provide more reward, but which is best for you and your family depends on your individual circumstances.
Any child under the age of 18, that lives in the UK, and does not have a Child Trust Fund, can have a JISA.
Withdrawal of money is only possible though when the child reaches 18, apart from a few exceptions. To this effect it is an excellent way to save in a structured way for your child’s education, their first car, or perhaps a deposit on their first home.
Once the child is 16 they can open an ISA and take advantage of the higher annual investment.
Save over £50k in 18 years!
As an example, if you invest £3,000 per year for 18 years into a Junior ISA, your child will have access to a saving fund of £54,000, plus accumulated interest. The interest is tax-free for both the child and you as the investor.
Before you go…
Don’t forget to download our FREE Financial Guide with information about Investing for Children.