Scrutton Bland Centenary Adviser Summer 2019

Child Trust Funds (CTF) Minimum investment: CTFs are

Trust Investment Minimum investment: Trust funds for

Ease of access: The child can withdraw cash after they are 18, after which time the cash remains tax free. Restrictions: A child can only have one Junior Cash ISA and one Junior Stocks and Shares ISA. How much can be saved into each one per year: Currently £4,368. Relatives can contribute to a JISA on top of their own £20,000 ISA limit. Other things to bear in mind: This type of account usually needs to be opened and potentially operated by a parent or guardian, ie not the grandparent. Junior Stocks and Shares ISA Minimum investment: Monthly minimum payment of £25 or a one off payment of £100 typically. The options available depend on the provider. Rates of interest: Varies depending on the investor’s attitude to risk and fund selected. There are various multi-asset funds that can be used with low cost and global diversification for the underlying investments. Ease of access: The child can withdraw cash after they are 18, at which time the cash remains tax free. Restrictions: A child can only have one Junior Cash ISA and one Junior Stocks and Shares ISA. The maximum investment is £4,368 per annum. Other things to bear in mind: The account usually needs to be opened and potentially operated by a parent or guardian, ie not the grandparent. Tax implications: Free from Income Tax and Capital Gains Tax.

Tax implications: Like adult pensions, a child’s pension is eligible for 20% tax relief, so if a grandparent pays in £2,880 each year the child’s account is grossed up to £3,600. Ease of access: Like all pension plans, the minimum age they can be accessed is 55. Restrictions: Access is restricted until the child reaches the age of at least 55 years old. A parent or guardian must open the account although others can contribute to it. If no relevant earnings are accrued in one tax year a maximum net contribution of £2,880 can be made. How much can be saved into each one per year: £2,880 net (£3,600 gross). Other things to bear in mind: Consider the investment risk required. There are a number of options available to you when considering investing for children. Before you commit to any investment you should always seek the advice of an Independent Financial Adviser. If the financial gifts are intended to mitigate Inheritance Tax then you should also consider consulting your Tax Adviser and solicitor.

no longer available. Existing arrangements have a maximum of £4,368 per annum and can be transferred to a Junior ISA. Rates of interest: Varied but CTFs were generally a form of savings account with varying rates of interest earned.

an individual can be set up so that one or more ‘trustees’ are legally responsible for holding assets for ‘beneficiaries’ (which could be grandchildren). Typically, this type of investment would be more suited to larger gifts of £50,000 and up. Rates of interest: Varies depending on the trustee’s attitude to risk and capacity for loss. Trustees have a responsibility to protect and invest funds appropriately for the beneficiaries. Tax implications: Dependent on type of trust and we would always recommend advice is sought. Ease of access: This can depend on the trust but could be at trustee’s discretion. Restrictions: Dependent on the trust but could be at trustee’s discretion. There may be an additional cost in setting up a trust deed and further advice may be required. How much can be saved into each one per year: Gifts to a trust over £325,000 may incur Lifetime Charge to Inheritance Tax. Other things to bear in mind: If monies are gifted to the trust then no benefit can be retained by the settlor if it is to be applicable for Inheritance Tax relief. Child

Tax implications: Free from Income Tax and Capital Gains Tax.

Ease of access (ie at what point can the child access their savings): The child can withdraw funds after 18.

Restrictions: CTFs are no longer available.

Other things to bear in mind: CTFs can be transferred into a Junior ISA to provide more savings or investment options. However a JISA and a CTF cannot be held concurrently. Premium Bonds Minimum investment: Minimum purchase of £25.

Rates of interest: Nil. Prizes awarded from a draw each month.

The information above provides an overview of the products and services available to you and should not be used as a guide to investing. For further information on investing for children or any aspect of your financial planning contact james.wright@ scruttonbland.co.uk or tel 0330 058 6559 .

Tax implications: No tax due on NS&I Premium Bond wins.

Ease of access: The parent or guardian must look after the account until the child turns 16. Restrictions: A range of adult friends and relations can buy Premium Bonds for children, however only a parent or guardian can manage the account. How much can be saved into each one per year: An individual can hold a maximum total saving of £50,000.

pensions Minimum

investment: Stakeholder

pensions can be setup for as little as £20 per month. Maximum of £2,880 net per annum. Rates of interest: Varies depending on the investors attitude to risk and capacity for loss.

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