My first daughter is about to be born (probably within the next week). I've been thinking about this problem a lot and my plan is to split the money we give her 3 ways. 15% into a junior ISA, which ill use to teach her about investing and she can use as she chooses. A further 15% into a Junior SIPP for her retirement one day. And the rest divided in half between mine and my wife's stocks and shares ISAs which we will pay out to her after she turns 18 at 4K per year but only deposited into a LISA. So that she is incentivised to spend that on a house.
Thanks I invest monthly into my sons Jisa so found this though provoking! Do I trust my parenting skills or my spreadsheet compounding formulas? I think it’s both!
Good stuff! Yes, you can't really beat Junior ISAs for tax efficiency and I think for the vast majority it's likely the right move. Cheers for watching 👍
I hadn't actually thought about this. Maybe more appropriate to try and fill my own ISA then think about my childs. If when they are 18 it is in the region of £5-10k I wouldn't be too worried, but leaving huge sums could cause more harm than good.
Yes, it's a tough balance to get right. If it's kept within individual control then in it's the estate for inheritance tax purposes. If it's in a Junior ISA it is owned by the child.... but then becomes the child's fully when they become eligible to withdraw! 😬
I've put £1000 into a junior SIPP and just leave it in there to compound then created a child's portfolio within my own ISA. So if my child isn't mature enough to take this on at 18 I can just withdraw it and put it into the SIPP
Thanks for watching. I'm sure there are many others who have done similar. It's a bit of a murky area as funds are considered legally the child's....I know, I know (what are they going to do etc...) but they are the rules.
- Be mindful of when you'd ideally like to distribute any gifts for your kids. - Be aware that it will be legally theres at a certain age and do rough calculations on the expected pot and if that is the intended outcome. - Consider the trade-off on IHT optimisation against having your own control if you have existing ISA allowances yourself. As always, it's about being intentional.
Awesome!! Thanks George. Some great options.
Thanks Esther! Appreciate you watching 👍
My first daughter is about to be born (probably within the next week). I've been thinking about this problem a lot and my plan is to split the money we give her 3 ways. 15% into a junior ISA, which ill use to teach her about investing and she can use as she chooses. A further 15% into a Junior SIPP for her retirement one day. And the rest divided in half between mine and my wife's stocks and shares ISAs which we will pay out to her after she turns 18 at 4K per year but only deposited into a LISA. So that she is incentivised to spend that on a house.
Hi Corbin, thanks for watching! Nice strategy. 👍 It definitely doesn't have to be an 'all or nothing.'
Thanks I invest monthly into my sons Jisa so found this though provoking! Do I trust my parenting skills or my spreadsheet compounding formulas? I think it’s both!
Good stuff! Yes, you can't really beat Junior ISAs for tax efficiency and I think for the vast majority it's likely the right move. Cheers for watching 👍
I hadn't actually thought about this. Maybe more appropriate to try and fill my own ISA then think about my childs. If when they are 18 it is in the region of £5-10k I wouldn't be too worried, but leaving huge sums could cause more harm than good.
Yes, it's a tough balance to get right. If it's kept within individual control then in it's the estate for inheritance tax purposes. If it's in a Junior ISA it is owned by the child.... but then becomes the child's fully when they become eligible to withdraw! 😬
I've put £1000 into a junior SIPP and just leave it in there to compound then created a child's portfolio within my own ISA. So if my child isn't mature enough to take this on at 18 I can just withdraw it and put it into the SIPP
Thanks for watching. I'm sure there are many others who have done similar. It's a bit of a murky area as funds are considered legally the child's....I know, I know (what are they going to do etc...) but they are the rules.
So your suggestion is …
- Be mindful of when you'd ideally like to distribute any gifts for your kids.
- Be aware that it will be legally theres at a certain age and do rough calculations on the expected pot and if that is the intended outcome.
- Consider the trade-off on IHT optimisation against having your own control if you have existing ISA allowances yourself.
As always, it's about being intentional.