Portfolio Stocks & Shares Junior ISA Account
What is a Junior ISA (JISA)?
Junior ISA is a tax efficient savings vehicle for children that was made available by the Government with effect from 1 November 2011. There are two types of Junior ISA available, Stocks & Shares Junior ISA and Cash Junior ISA.
What is Portfolio Stocks & Shares Junior ISA Account?
The Portfolio Stocks & Shares Junior ISA Account is suitable for those comfortable selecting their own risk profile and portfolio without the provision of advice or need for active investment portfolio management. This account allows you to invest tax efficiently on behalf of child. The account provides an option to choose from three ready-made portfolios consisting of investment funds, each of which reflects a different risk category. These portfolios are rebalanced quarterly.
Who is the ISA Manager?
The ISA Manager is James Brearley & Sons, of PO Box 34, Walpole House, Unit 2, Burton Road, Blackpool, FY4 4WX. James Brearley & Sons is a Member of the London Stock Exchange, Authorised and Regulated by the Financial Conduct Authority and a Member of the Wealth Management Association.
Who can have a Junior ISA?
JISA can be opened on behalf of children under 18 years of age. Children born between 1st September 2002 and 2nd January 2011 should have a Child Trust Fund (CTF), in which case the full value of the CTF would need to be transferred as part of the Junior ISA application.
The child must be resident in the UK when the Junior ISA is opened (or a dependant of a crown servant living overseas). Although the funds in the Junior ISA belong to the child at all times, the JISA must be opened and operated by a ‘Registered Contact’ until the child reaches at least 16 years of age. The Registered Contact will be the person with parental responsibility for the child, with the child able to take over as the Registered Contact, if they wish, at age 16.
What’s the maximum that can be invested?
The annual Junior ISA allowance for the tax year 2017/18 is £4,128 or £344 per month. This amount can be split between a Stocks & Shares Junior ISA and a Cash Junior ISA, providing the overall limit is not exceeded in the tax year (6 April to 5 April).
What investment options are available?
You can choose from three different portfolios consisting of investment funds, each of which reflects a different risk category. The risk categories and portfolios available are as follows:
- Low to medium risk - Cautious portfolio
- Medium risk - Balanced portfolio
- Medium to high risk - Growth Portfolio
The description of each risk category, the composition of portfolios for each risk category and information on each constituent fund is accessible on Simply Ethical website.
Choosing a portfolio constitutes an instruction to us to buy each fund comprising the portfolio in accordance with stated allocation weightings. You cannot change the fund holdings, their respective proportions, remove existing funds or add new funds in the portfolio. If you do not agree with the exact portfolio composition or you wish to make changes, then Self Select Portfolio service is not suitable for you.
How often is the portfolio rebalanced?
We rebalance your portfolio by placing instructions with the Service Provider to invest, dispose of and re-invest cash in the constituent funds of your portfolio. We will rebalance your portfolio quarterly on 12th day of January, April, July and October (or the first available Business Day after the 12th where such date does not fall on a Business Day). Rebalancing will return each of the fund holdings within the portfolio to the original allocation weightings.
Can a 16 year old with 'adult' Cash ISA apply for a Junior ISA?
Yes. 16 year olds who have already opened an adult Cash ISA are still eligible to open a Junior ISA if they do not have a Child Trust Fund. At the age of 16, an investor can hold £4,128 in a Junior ISA in stocks and shares or cash, and also an adult Cash ISA. Simply put, 16 and 17 year olds currently get two ISA allowances - £4,128 in a Junior ISA and £20,000 in adult cash ISA. That's because they're also allowed to open an adult Cash ISA from the age of 16 too. So under the current rules, they could save up to £24,128 in ISAs for the 2017/18 tax year.
Can overseas residents open a Junior ISA?
Normal ISA regulations apply. If you are an employee, spouse or dependant of a crown employee then they are able to open a Junior ISA. If you open a Junior ISA and later move abroad then standard client eligibility rules apply.
What are the charges?
There are no initial charges.
The annual administration charge is tiered within bands as follows:
- 0.85% per annum for the first £100,000;
- 0.50% per annum between £100,000 and £500,000; and
- 0.30% per annum above £500,000.
This charge is subject to a minimum of £12.50 per quarter. This charge is calculated daily, based upon the value of your investments and charged to the account at quarterly intervals on 31st March, 30th June, 30th September and 31st December each year.
Please read our Charges Schedule for complete details. This is accessible through our website www.simplyethical.com or by contacting us.
Can a child have different Junior ISAs?
Every eligible child can hold both a Stocks & Shares JISA and a Cash JISA at any one time with the same or different product providers, providing the overall investment allowance is not exceeded.
How long is the money invested?
The Junior ISA will mature when the child reaches 18 years of age. At this time the child can withdraw the funds or rollover the investment in to an adult ISA in their own name. Withdrawals are not allowed at any time before age 18.
Can I add to the child’s investment?
Yes, providing you don’t exceed the maximum annual investment allowance you can add to the Junior ISA at any time during the tax year. Any person can subscribe to the child’s Junior ISA, including parents, grandparents, family members and friends. All subscriptions will be classed as gifts to the child, which means that once contributions have been added to the Junior ISA, under normal circumstances (except on early death or the diagnosis of a terminal illness), the funds cannot be withdrawn until the child reaches the age of 18.
Can I withdraw from the child’s Junior ISA?
No, the funds in a Junior ISA are not available for withdrawal until the child reaches 18 years of age and at this time the Junior ISA maturity proceeds will be paid to the child and not the Registered Contact.
Can I transfer a CTF to a Junior ISA?
Yes, from 6 April 2015 those with a Child Trust Fund (CTF) may transfer to a Junior ISA. This must be the whole amount as partial transfers are not allowed. Any such transfer will not count towards the child’s Junior ISA allowance.
Can I transfer Junior ISAs held with other providers to Portfolio Stocks & Shares Junior ISA Account?
You can transfer:
- Your current year Junior ISA subscriptions and/or
- All or part of Junior ISA subscriptions made in previous tax years
If your Junior ISA contains current year subscriptions only, the entire account must be transferred.
How do I transfer my existing Junior ISA to Simply Ethical?
To transfer your existing account, please complete our online account opening application and the transfer form.
We only accept transfer in the form of cash.
Cash transfer means that your current investments will be sold and the cash transferred to your Junior ISA for you to buy investments of your choice (subject, of course, to the Junior ISA eligibility rules and the investments being available on our platform and satisfying our ethical investment criteria).
Please be aware that a cash transfer means:
- You may lose out on investment growth while your investment is not invested during the transfer period.
- You may incur charges when you purchase new investments to be held within your account with us.
- You will not have access to your Junior ISA until such time as the transfer is complete.
Can I transfer my Portfolio Stocks & Shares Junior ISA Account to another Junior ISA provider?
Yes, we will require a completed transfer authority form from your new Junior ISA provider. We can make the transfer by cash or we can transfer your investment holdings direct to your provider without selling them. However, the way in which we transfer will be determined by your new Junior ISA provider’s terms and conditions. Note that there may be transfer out charges. Please read our Charges Schedule for complete details. This is accessible through our website www.simplyethical.com or by contacting us.
What about tax?
Just like Stocks & Shares ISA, no tax is payable on the income or capital gains a child receives from Junior ISA savings and investments. Neither you nor the child has to include any information about the Junior ISAs in their tax return.
What happens to the Junior ISA if the child is diagnosed with a terminal illness?
The Registered Contact will need to make a claim to HMRC for the release of the funds. If they agree to the request, HMRC will issue a letter to confirm this. This letter must be forwarded to us and we will retain it. The return of funds can be made to the Registered Contact in cash or by transfer directly of the investments held in Junior ISA. Partial transfers out are permissible, and the Junior ISA can remain open, subject to any minimum balance that we may require to be held in the Junior ISA being maintained.
What happens to the Junior ISA if the child dies?
On death, the child’s Junior ISA ceases and thereafter we will only accept instructions from their personal representatives on the account. Any subscriptions paid after death has occurred are invalid and will have to be returned. Dependent upon the eligible child's personal representatives’ instructions, the investments will either be sold and the proceeds paid to them, or the investments can be transferred to them.
Please be aware that the value of the Junior ISA may be included as part of the child’s estate for inheritance tax purposes.
What happens to the Junior ISA if the Registered Contact dies?
In such unfortunate event, we are unable to complete any transactions and the investments will be frozen until a new Registered Contact is appointed. We will need to see the original (or certified copy) of death certificate. Another person with parental responsibility for the child (or the child if aged 16 or over) should then apply to become the new Registered Contact.
What might the Child get back?
The amount you get back is not guaranteed and depends on a number of factors, such as:
- How much you invested
- The length of time you invested for
- The performance of the investments you have chosen
- How much our charges are
- The amount of any withdrawals you have taken
Can I change my mind after I have subscribed to Portfolio Stocks & Shares Junior ISA Account?
Yes. After we have opened your account we will confirm this in writing. You will then have 14 calendar days starting from the day you receive this to change your mind and cancel your account. If you decide to cancel, you should write to us at our registered address.
Once we have received your notification, we will give you your money back less any other payments, charges and fees in accordance with the Self Select Service Terms and Conditions. If your investments have fallen in value, you will get back less than you invested.
If you wish to cancel the Junior ISA outside the 14 day period, the subscription counts as a subscription to a Junior ISA, the payments cannot be returned or paid out to the child and you will not be able to subscribe to another Junior ISA of the same type. Subsequent transfer to a new provider is permitted, upon receipt of the relevant request.
If you do not cancel your account it will continue in force in accordance with the Self Select Service Terms and Conditions.
Can I change my mind after I have requested a transfer of Junior ISA to Simply Ethical?
The 14 day period also applies to Junior ISA transfer requests, so provided you cancel within the 14 day period, you can either:
- Transfer your Junior ISA back to the original Junior ISA provider, who is not obliged to accept the transfer back, or
- Transfer your Junior ISA to another Junior ISA provider, or
- Close your Junior ISA and have the investments and/or proceeds returned to you, subject to Junior ISA rules
If you do not cancel your transfer request, your transfer will form part of the child’s Junior ISA which will continue in force in accordance with the Self Select Service Terms and Conditions.