Child Trust Funds (Amendment) Regulations 2026
Published 9 March 2026
© Crown copyright 2026
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Who is likely to be affected
Children and families of children with Child Trust Funds.
Financial institutions who provide or manage Child Trust Funds.
General description of the measure
This measure will provide that cryptoasset exchange traded notes (cETNs) cannot be held in a Child Trust Fund with effect from 6 April 2026. cETNs which were held in a Child Trust Fund prior to 6 April 2026 can remain within the account.
Policy objective
The measure recognises that cETNs are classified as restricted mass market investments given their risk profile and volatility. The measure makes sure that qualifying investments for a Child Trust Fund are appropriate for the account.
Allowing cETNs which were held in accounts prior to 6 April 2026 to remain in them provides certainty to investors and Child Trust Fund providers.
Background to the measure
On 8 October 2025 it was announced that, with effect from 6 April 2026, cETNs will be reclassified as qualifying investments for Innovative Finance Individual Savings Accounts only. Child Trust Funds do not have the equivalent of an Innovative Finance Individual Savings Account (IFISA).
Detailed proposal
Operative date
The measure will have effect from 6 April 2026.
Current law
The Child Trust Fund rules are set out in the Child Trust Funds Regulations 2004 (SI 2004/1450), which are made under powers in the Child Trust Funds Act 2004.
The Child Trust Funds Regulations specify the conditions for opening and managing a Child Trust Fund account, including the types of investments that qualify to be held within such accounts. One such rule is that only authorised or recognised funds may be held in Child Trust Fund. cETNs are not currently defined separately from other securities.
Proposed revisions
The Regulations will be amended to define cETNs for the purposes of the Child Trust Fund Regulation and provide that cETNs, as defined, are not eligible for a Child Trust Fund. cETNs which were held in a Child Trust Fund prior to 6 April 2026 can remain within the account.
Summary of impacts
Exchequer impact (£million)
| 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 |
|---|---|---|---|---|---|
| — | negligible | negligible | negligible | negligible | negligible |
This measure is expected to have a negligible impact on the Exchequer
Macroeconomic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
The measure will allow cETNs which were held in a Child Trust Fund prior to 6 April 2026 to remain within the account. It will therefore not be necessary to liquidate such investments and reinvest the released monies.
The measures is not expected to impact on family formation, stability or breakdown.
This measure is not expected to affect individuals experience of dealing with HMRC as this does not change any processes or tax administration obligations.
Equalities impacts
An individual may be impacted by this measure regardless of their protected characteristics. If a protected group is overrepresented in this population, then it will be disproportionately impacted. HMRC does not currently hold data on the protected characteristics of individuals impacted by this measure and so cannot determine conclusively if there are any equality impacts.
Impact on business including civil society organisations
The measure will have a negligible impact on those Child Trust Fund providers who offered cETNs in their products before the restrictions became effective as cETNs which were held prior to 6 April 2026 can remain within the account.
One-off costs for those Child Trust Fund managers will include familiarisation with the changes to make sure they are compliant and changes to supporting business processes.
This measure is not expected to negatively affect businesses’ experience of dealing with HMRC as this does not change any processes or tax administration obligations.
This measure is not expected to impact on civil society organisations.
Operational impact (£million) (HMRC or other)
The overall additional costs for HMRC in implementing the changes are expected to be negligible. These are restricted to updating the Child Trust Fund Guidance and confirming the changes with the industry.
Other impacts
Other impacts have been considered, and none have been identified.
Monitoring and evaluation
Consideration will be given to monitoring this measure through information collected from ISA manager returns and kept under review through communication with affected taxpayers and the financial services industry.
Further advice
If you have any questions about this change, contact Helen Williams on 03000 200 3300 or email: savings.audit@hmrc.gov.uk.
Declaration
Lucy Rigby MP, Economic Secretary at His Majesty’s Treasury has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.