What is a Junior ISA and what benefits does it offer your child?
Junior ISAs (Individual Savings Accounts), or JISAs, were introduced as a replacement for Child Trust Funds (CTFs). A Junior ISA is a tax-free savings or investment account to save or invest in for your child. There are two types of Junior ISA: a Junior cash ISA that pays interest, and a Junior stocks and shares ISA that lets you invest in “qualifying instruments” such as stocks and shares, funds, etc. The interest on cash accumulates on a tax-free basis, as does income and capital gains made on investments.
A Junior stocks and shares ISA is not an investment in its own right. The best way to think of a Junior stocks and shares ISA is as a ‘wrapper’ with which you can shelter your child’s savings and investments from both Income Tax and Capital Gains Tax. The IBUK Junior Stocks and Shares ISA lets you choose from a range of investments to invest in for your child (see below section 12 ‘What can I invest in for my child?’). You can select and manage your child’s IBUK Junior Stocks and Shares ISA yourself or arrange for your financial advisor to do so on your behalf (see below section 9 ‘Can I appoint a financial advisor to manage, on a discretionary basis, my child’s IBUK Junior Stocks and Shares ISA?’).
What ISA types are offered at IBUK?
Interactive Brokers (U.K.) Limited (IBUK) only offers stocks and shares ISAs (including, Junior Stocks and Shares ISA). IBUK does not offer cash ISAs (including, Junior cash ISA).
Who is eligible for a Junior ISA?
Your child is eligible for a Junior ISA if they’re under the age of 18, and resident in the UK. You can also open a Junior ISA for your child if you are a crown employee serving overseas.
A child cannot hold both a CTF (Child Trust Fund) account and a Junior ISA. This is relevant to anyone under 18 who was born between 1 September 2002, when CTFs were introduced, and 3 January 2011 when they came to an end. If your child holds a CTF account, you cannot open an IBUK Junior ISA since IBUK does not support CTF transfers, other Junior ISA providers may accommodate your Junior ISA request.
How many Junior ISAs can a child have?
A child can have no more than one Junior cash ISA and one Junior stocks and shares ISA at any one time (don’t have to be with the same provider). A child cannot hold both a CTF (Child Trust Fund) account and a Junior ISA.
Who can open a Junior ISA and who is the registered contact?
You can open a Junior ISA for a child if you’re their parent or legal guardian. The parent or legal guardian opening the account will be the ‘registered contact’, but the money will not be accessible to them and will always belong to the child. The child normally won’t be able to access the money until their 18th birthday, at which point their Junior ISA is converted into an ‘adult’ ISA.
As the registered contact for a Junior ISA, you are the only person authorised to make decisions about the management of the account. You’ll also need to keep IBUK informed if the child’s personal details change, e.g., if they change their name, address, contact number, etc.
How do I change the registered contact for an IBUK Junior Stocks and Shares ISA?
You should use our change of registered contact form (via Client Portal) to change the registered contact for an IBUK Junior Stocks and Shares ISA. The existing registered contact must sign this application to authorise this change unless where certain exemptions apply.
Note: IBUK will not allow a child to be the Registered Contact upon their 16th birthday, other ISA providers may allow this (i.e., once the child reaches the age of 16, the child can apply to become the Registered Contact).
For more information on how to change a registered contact please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays (see below section ‘What if I have additional questions?’)
Who owns the Junior ISA and what happens when the child turns 18?
All payments made into a Junior ISA belong to the child (i.e., all payments made into the Junior ISA are a gift to the child and as such cannot be repaid to the subscriber if at a later date the subscriber changes their mind). The parent or guardian who opened the Junior ISA acts as the registered contact, but they can’t access the money once it has been deposited, unless there are exceptional circumstances (see below section 11 ‘Can I make withdrawals from a Junior Stocks and Shares ISA?’). When your child turns 18, the IBUK Junior Stocks and Shares ISA will automatically become an ‘adult’ IBUK Stocks and Shares ISA (i.e., when the child turns 18, account ownership is automatically transferred to them). As an adult, they’ll become the account holder, responsible for managing their account and able to withdraw monies. For more information on how this transfer of control (from the registered contact to the child (upon the child’s 18th birthday)) works, please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays (see below section 29 ‘What if I have additional questions?’)
Can you lose your child’s money paid into a Junior Stocks and Shares ISA?
The value of investments your child holds in the IBUK Junior Stocks and Shares ISA and the income received from them can fall as well as rise. As a result, you may get back less than you invested in for your child. Past performance is not an indication of future performance, and some investments need to be held for the long term to achieve a return. The IBUK Junior Stocks and Shares ISA is an execution only service, we do not provide investment advice. If you need advice about whether an investment is suitable, you need to consult a suitably qualified financial advisor.
Can I appoint a financial advisor to manage, on a discretionary basis, my IBUK Junior Stocks and Shares ISA?
Yes, you can appoint a financial advisor to manage the IBUK Junior Stocks and Shares ISA on your behalf. Click this link for additional details.
Can I trade on margin under the IBUK Junior Stocks and Shares ISA?
No. You can only open an IBUK Junior Stocks and Shares ISA under a GBP cash account type. A cash account requires that all transactions are made with available cash or long positions.
Can I make withdrawals from a Junior Stocks and Shares ISA?
No, unless exceptional circumstances exist. All payments made into the IBUK Junior Stocks and Shares ISA are a gift to the child and so cannot normally be withdrawn until the child turns 18. NB. withdrawals are permitted if the child is terminally ill or has died in accordance with the ISA Regulations.
What can I invest in for my child?
Under a Junior stocks and shares ISA you can invest in any of the following investments (also known as 'qualifying investments'):
Securities issued by Companies;
Depository Receipts, American Depository Receipts and American Depository Shares.
What exchanges does IBUK support?
HMRC recognised exchanges supported by IBUK:
|The Australian Stock Exchange (and any of its stock exchange subsidiaries)
|Vienna Stock Exchange
|NYSE Euronext Brussels
Toronto Stock Exchange
Montreal Stock Exchange
Toronto Venture Exchange (TSX Venture Exchange)
Frankfurt Stock Exchange
Stuttgart Stock Exchange
|Hong Kong Stock Exchange
|Italian Stock Exchange (Borsa Italia)
Tokyo Stock Exchange
Osaka Stock Exchange
|NASDAQ OMX Vilnius
|Mexico Stock Exchange
|Warsaw Stock Exchange
|Singapore Exchange Limited
|Spanish Stock Exchange (Bolsa de Valores in Madrid)
|Swiss Stock Exchange (SIX Swiss Exchange)
|London Stock Exchange
|United States of America
BATs Exchange Inc
Chicago Board Options Exchange
Chicago Stock Exchange
International Securities Exchange
National Stock Exchange
New York Stock Exchange
NASDAQ OMX PHLX
What is the Junior ISA Allowance for 2023/2024 tax year?
Tax year runs from 6 April to the following 5 April. Each tax year’s Junior ISA subscription limit is specific to that year and can be checked on the HMRC website.
Note: For each tax year, you can check (via the funding page in Client Portal) how much you have subscribed to your child’s IBUK Junior Stocks and Shares ISA and the maximum amount that you can contribute to your child’s IBUK Junior stocks and shares ISA in that tax year, assuming you have not contributed to another Junior ISA away from us.
For the 2023/24 tax year, the Junior ISA annual subscription limit is £9,000. This is a combined annual limit across both types of Junior ISA: cash, and stocks and shares. The subscription limit can be split in any way between cash, and stocks and shares Junior ISAs each tax year.
How do I make subscriptions to my IBUK Junior Stocks and Shares ISA?
You can make one-off payments (wire transfers deposits) as and when you choose, but the combined total of all payments (or subscriptions) must not exceed any given annual tax year allowance (see section 14. What is the 2023/2024 Junior ISA Allowance?).
We accept wire transfers only, and there is a minimum subscription amount of £1. Your child’s IBUK Junior Stocks and Shares ISA can only have GBP cash. Although other Junior ISA providers might have different terms, only parent or legal guardian can pay into your child’s Junior ISA with IBUK.
What happens if I exceed my child’s Junior ISA allowance?
If you have accidentally paid too much into your child’s Junior ISAs your child won’t get any tax relief on the excess payments you’ve made. The Junior ISA allowance is a combined annual limit across both types of Junior ISA: cash, and stocks and shares.
What should I do if I exceed my child’s Junior ISA allowance?
In the event you oversubscribe to your child’s Junior ISA (in other words your child’s Junior ISA annual allowance was exceeded), you should not attempt to correct the mistake by withdrawing the excess funds from a Junior ISA (including, but not limited to, your IBUK Stocks and Shares ISA). Instead, you should call HMRC’s ISA helpline to explain the situation and inform them about the oversubscription. HMRC will advise you on the next steps. NB. The Junior ISA allowance for the tax year 2023/2024 is GBP 9,000 (this is a combined limit across both types of Junior ISA: cash, and stocks and shares).
What is the annual fee for the IBUK Junior Stocks and Shares ISA?
There is no annual Junior ISA fee at IBUK. Other costs and charges apply, see below section 19 for more information.
What are the charges for the IBUK Junior Stocks and Shares ISA?
£1 per month minimum activity fee. One free withdrawal per month. Thereafter, £7 withdrawal fee is applicable.
Click on the link for an overview of our commissions:
How do I transfer my child’s Junior Stocks and Shares ISA from my current ISA manager to IBUK?
You will need to submit a transfer instruction to us (via the transfer & pay funding page in Client Portal), and if, in IBUK’s discretion IBUK decides to accept the transfer, IBUK will instruct your existing ISA manager to transfer the investments (where IBUK supports such investments) and/or cash into your child’s IBUK Junior Stocks and Shares ISA. Where IBUK does not support all the investments held at your existing ISA Manager, you can either liquidate these investments yourself prior to submitting your transfer instruction to IBUK via Client Portal (any cash proceeds of such liquidation will be transferred into your child’s IBUK Junior Stocks and Shares ISA) or you can instruct IBUK (as part of your transfer instruction via Client Portal) to do so on your behalf. NB. IBUK does not accept the transfer of a Child Trust Fund (CTF) over to a Junior Stocks and Shares ISA, other Junior ISA providers might support such transfer service.
Transfers between an ‘adult’ ISA and Junior ISA are not permitted.
How do I transfer a Junior ISA out of IBUK to another provider?
Any transfer out request from IBUK must be requested via the transfer & pay funding page in Client Portal.
What are the Transfer Charges?
We do not charge for transfers (the transferring ISA manager may charge you for transferring investments or cash proceeds to us).
Can I cancel my IBUK Junior Stocks and Shares ISA?
You have a legal right to cancel your child’s IBUK Junior Stocks and Shares ISA if you change your mind but there are time limits on doing so, see below section 24 for more information.
How can I cancel my child’s IBUK Junior Stocks and Shares ISA?
If you want to cancel your child’s IBUK Junior Stocks and Shares ISA, you must do so within 14 days from the date you receive our email confirming the establishment of your child’s IBUK Junior Stocks and Shares ISA (a cancellation must be requested from the Client Portal).
Cancellation rights will also apply to the receipt of transfer payments. You have 14 days from the date you receive our email acknowledging the transfer to exercise your right to cancel (a cancellation must be requested from the Client Portal). NB. If you cancel the transfer of your child’s Junior Stocks and Shares ISA from another ISA manager to IBUK, that ISA manager may not agree to accept the Junior Stocks and Shares ISA back. This may result in that Junior Stocks and Shares ISA being closed, and the tax benefits being lost.
How safe is your child’s IBUK Junior Stocks and Shares ISA?
IBUK is authorised and regulated by the Financial Conduct Authority (FCA), and is approved by HMRC to act as an ISA manager (including in respect of stocks and shares ISAs).
Under our client terms, and in accordance with the FCA rules relating to client money and assets (Assets), IBUK will be responsible for holding and protecting your child’s Assets. IBUK is required to separate your child’s Assets from its own resources. IBUK is not permitted to use your child’s Assets to carry out its business activities.
In the unlikely event that IBUK became insolvent, an administrator would be appointed to return your child’s money/assets to you. If there is any shortfall, eligible claims will be covered by the UK Financial Services Compensation Scheme (“FSCS”). The FSCS is an independent body set up by the UK Government to pay compensation if a UK firm, such as IBUK, is in default and cannot meet any valid claims against it. FSCS claims are limited to £85,000 per client. Please note, the FSCS applies to designated investments and may not cover all investments or transactions (and in particular these protections don’t apply to investment losses). For more information on the FSCS see www.fscs.org.uk.
How can I file a complaint with IBUK?
Customers are actively encouraged to use the WebTicket system for prompt attention.
A copy of our Complaints Procedure is available here: https://www.interactivebrokers.com/en/index.php?f=292. You can also direct your ISA specific complaints via email to firstname.lastname@example.org (Please note that in order to ensure that your complaint is flagged and given the required attention, we kindly asks you to state "COMPLAINT" in the subject header field of the email).
Are Corporate Actions allowed under my child’s IBUK Junior Stocks and Shares ISA?
Allowed to participate but cannot exceed the annual Junior ISA subscription limit. If it were to exceed the subscription limit, the shares should be transferred to a non-ISA account (see above sections 17 ‘What should I do if I exceed my child’s Junior ISA allowance?’.
FX Handling and the IBUK Junior Stocks and Shares ISA
We will automatically convert currencies when trading non-GBP denominated securities. To do this, we will engage in “spot” currency transactions on your behalf in order to settle your buy orders or convert the proceed of a sell order. We will base the exchange rate off the spot exchange rate at the time of trade 0.03% fee.
The below example illustrates the cost in GBP of a $1,000 USD Trade
Example GBP/USD Spot Rate: 1.3432/1.3433
|FX Conversion Rate inc 0.03% fee
|Cost of $1000 USD Trade
Can I allow my child’s IBUK Junior Stocks and Shares ISA to be used as security for any borrowing?
No. In accordance with HMRC regulations, any investments and/or cash within your child’s IBUK Junior Stocks and Shares ISA will be, and must remain, completely beneficially owned by your child and you must not grant any rights or interests over the investments to any other person (for example, you must not allow your child’s investments to be used as security for any borrowing).
Can my child’s IBUK Junior Stocks and Shares ISA participate in the Interactive Brokers Stock Yield Enhancement Program (SYEP)?
No. In accordance with HMRC regulations, IBUK Junior ISA holders are not eligible to participate in the SYEP.
What if I have additional questions?
Our client services team are on hand to help via phone or email. If you have any questions about your IBUK Stocks and Shares ISA, please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays.