How ISAs can stash £14,280 in one tax year
A quirk in the ISA rules allows those in their 18th year to invest in both a Junior Stocks & Shares ISA and an 'adult' Stocks & Shares ISA in the same tax year. Here's how it works, explains Danny Cox, Head of Advice at Hargreaves Landsdown.
Junior ISAs allow subscriptions until the eve of the child's 18th birthday. From April 6th one year until April 5th the next year, up to £3,600 can be invested into a Junior ISA.
On a child's 18th birthday they become entitled to the full 'adult' ISA allowance of £10,680. Subscriptions made to the Junior ISA currently have no bearing on the 'adult' ISA allowance. This means that in their 18th year between 6 April and their 18th birthday Junior ISA contributions of up to £3,600 can be made, and between their 18th birthday and April 5th, 'adult' ISA contributions of up to £10,680 can be made.
For one year only your child could make contributions of up to £14,280 into tax privileged ISAs (tax year 2011/12). However, please remember the value of tax shelters will depend on personal circumstances and tax rules can change over time.