Junior Investment Account – Retaining ownership
Retaining ownership means you can keep control of your investments and access the money before your child reaches 18.
This flexibility means you can use it for day-to-day expenses, like school fees, sports equipment or other necessities. The plan is held in your name with the child’s name as a designation. This will usually be done by putting their initial on the account name. You can then transfer the account into your child’s name when they are 18, or you can decide to keep it in your name.
Junior Investment Account – Gifting ownership
By deciding to give ownership to the child, the funds are given to the child now. However, as children under 18 cannot be the legal owner of an account, you can appoint up to four adults to look after the investment on behalf of the child. This has the benefit that it would not form part of your estate for inheritance tax purposes. You will not be able to access the money as the assets belong to the child.
However, withdrawals can be made for the child’s expenses. If you’re a trustee you’ll have legal control over the plan until the child reaches legal capacity. That is 18 years old in England and 16 years old in Scotland.