Individual Savings Accounts: Statutory Instrument increasing the Junior ISA subscription limit for 2018 to 2019
Published 6 April 2018
Who is likely to be affected
Children with a Junior ISA with more than £4,128 saved per year.
Banks, building societies and other financial institutions who offer Junior ISAs.
General description of the measure
The measure increases the amount that can be saved annually into a Junior ISA from £4,128 to £4,260 from 6 April 2018. Interest and gains received on money saved in an ISA is tax free.
Policy objective
The measure supports savings for children.
Background to the measure
At Autumn Budget 2017, the government announced that the annual subscription limit for Junior ISAs would increase to £4,260 from 6 April 2018. Around 794,000 Junior ISAs received subscriptions in 2016 to 2017.
Detailed proposal
Operative date
The measure will have effect from 6 April 2018.
Current law
The account rules for ISA and Junior ISA are set out in the Individual Savings Account Regulations 1998 (SI 1998/1870) (ISA Regulations), which are made under powers in the Income Tax (Trading and Other Income) Act 2005 and the Taxation of Chargeable Gains Act 1992.
The ISA Regulations set out the annual subscription limits for Junior ISAs.
Proposed revisions
The ISA Regulations will be amended by the Individual Savings Account (Amendment) Regulations 2018 to increase the amount that can be paid into a Junior ISA each year from £4,128 to £4,260.
Summary of impacts
Exchequer impact (£m)
2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 |
---|---|---|---|---|---|
negligible | negligible | negligible | negligible | negligible | negligible |
The measure is expected to have a negligible impact on the Exchequer.
Economic impact
The measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
The measure will increase the amount that can be saved into a Junior ISA.
The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that the measure will impact adversely on any groups with protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on ISA providers. One off costs include familiarisation with the new limits and adjusting their accounting systems to take account of the new Junior ISA subscription limit from 6 April 2018. It is not expected that there will be any on-going costs. There is no impact on civil society organisations.
Operational impact (£m) (HMRC or other)
The overall additional costs for HM Revenue and Customs (HMRC) in implementing these changes are anticipated to be negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be kept under review through communication with affected taxpayer and provider groups.
Further advice
If you have any questions about this change, please contact Helen Williams on Telephone: 03000 512336 or email: savings.audit@hmrc.gsi.gov.uk
Declaration
John Glen MP, Economic Secretary to the 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.