Draft regulations: maturing Child Trust Funds
Download the full outcome
Detail of outcome
The summary of responses will be of interest to providers of Child Trust Funds (CTF) and Individual Savings Accounts (ISA), CTF holders and their parents, representative groups for children and young adults, and other individuals or organisations concerned with promoting financial awareness and capacity among children and young adults.
It summarises the responses to HM Revenue and Customs’ consultation on draft CTF and ISA regulations, which took place between 6 June and 11 August 2019. It also outlines the decisions the government has taken and the proposed next steps.
The changes will provide that where, at maturity, no instructions have been received from the account holder on the future of the investments in the CTF, the investments will be held in a ‘protected account’ pending instruction. Funds in the ‘protected account’ will retain their tax advantaged status, and the terms and conditions which applied before maturity.
Changes will also provide for the investments to be transferred to an ISA outside the annual ISA subscription limit.
You can read:
- The Child Trust Funds (Amendment) Regulations 2020 and an explanatory memorandum
- The Individual Savings Account (Amendment) Regulations 2020 and an explanatory memorandum
- a tax information and impact note
- the summary of responses
Original consultation
Consultation description
A Child Trust Fund (CTF) is a tax-advantaged savings account which provides children born between 1 September 2002 and 2 January 2011 with an asset when they reach adulthood.
CTFs begin maturing in September 2020 when the first children reach 18. Without legislative change the investments will lose their tax-advantaged status at maturity.
An announcement was made at Budget 2018 that consultation would take place on draft regulations which would ensure that the funds in maturing CTF accounts could retain their tax-advantaged status after maturity.
The government has today published draft legislation, together with a tax information and impact note, for technical consultation.
You can read:
- technical consultation document: Maturing child trust funds - draft regulations
- (draft) The Child Trust Funds (Amendment No. X) Regulations 2020
- (draft) The Individual Savings Account (Amendment No. X) Regulations 2020
- a tax information and impact note (draft)
Documents
Last updated 15 January 2020 + show all updates
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Published outcome summary, including links to final regulations and explanatory memorandums, and link to a tax information and impact note.
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First published.