New tax-free children's savings account
The Government has announced that they will create a new tax-free children's savings account following the end of Child Trust Fund (CTF) eligibility.
The Government intends the new accounts to be available by autumn 2011.
The new account will have the following key features:
- all returns will be tax-free
- funds placed in the account will be owned by the child and are locked in until the child reaches adulthood
- investments will be available in cash or stocks and shares
- annual contributions will be capped and
- there will be no Government contributions into the account.
The new account, described as a 'Junior ISA', will offer parents a simple and tax free way to save for their child's future.
Eligibility for the new account will be backdated, to ensure that no child born after the end of CTF eligibility will miss out on the chance to have one of the accounts. There will be no CTF eligibility for children born from January 2011.
Internet link: Treasury press release