Find out what a Junior ISA is and how to manage applications.
Overview of the JISA
Junior Individual Savings Accounts (JISAs) became available on 21 November 2011. A JISA is a type of ISA available to eligible children in respect of which instructions are given by a ‘registered contact’. JISA is a voluntary product, and there is no requirement that a child holds an account, or an account of any particular type. Most of the ‘adult’ ISA rules apply. This section sets out rules that apply specifically to JISAs.
A JISA is an investment account of an eligible child managed in accordance with the ISA regulations under terms agreed between the ISA provider and the registered contact. Any person can subscribe to a child’s JISA.
A child is an eligible child for a JISA if, when the account application is made:
- they are under age 18
- they were born on or after 3 Jan 2011 or do not have a Child Trust Fund (CTF) account
- they are resident in the UK, or are a UK Crown servant, married to or in a civil partnership with a Crown servant, or a dependent of a Crown servant
Account managers should not refuse to take JISA applications because the child is within the CTF eligibility age range - born after 31 August 2002 and before 3 January 2011.
There may be a number of reasons why a child in the CTF age range is not eligible for a CTF. JISA providers may draw customers’ attention to the rule that children with a CTF cannot have a JISA, but providing the application form is fully completed it should be accepted without further query:
- a person with parental responsibility for any eligible child - or the child themselves if they are aged between 16 and 18 - can apply to open a JISA and become the registered contact - child can hold 2 types of JISA
- a stocks and shares JISA
- a cash JISA
Unlike ‘adult’ ISAs where the investor can open and subscribe to new ISAs in each tax year, a child can only hold up to 2 JISAs - no more than one of each type - throughout their childhood,although between ages 16 and 18 they can hold one of each type of JISA plus an ‘adult’ cash ISA. However, no child is required to hold either type of account. They may have no JISA at all, or only one type of account.
A child cannot hold an innovative finance ISA or a Lifetime ISA.
In most respects the terms and conditions under which JISA accounts are offered are matters for the account provider, as agreed with the registered contact. This is however subject to certain minimum requirements set out in JISA legislation and described throughout this guidance.
The registered contact is the person who can agree with the account manager the terms and conditions under which the account will operate, and give instructions to the account manager for the management of the account. There can be only one registered contact for an account at any time. The registered contact will be:
- the child holding the account - unless, in England or Wales they lack mental capacity or in Scotland or Northern Ireland they are suffering from mental disorder - if they are aged over 16 and have taken on management of the account by making an application to the account provider for registered contact status
- a person with parental responsibility for the child holding the account
The registered contact will be the account contact for all statement and correspondence purposes.
The income generated from parental subscriptions to a JISA does not count toward the parent’s income under the settlements legislation (section 629 Income Tax (Trading and other Income) Act ITTOIA 2005). For Inheritance Tax purposes, gifts made by a parent to a JISA are treated in the same way as any other gifts they make.
The provider holds investments on behalf of the child, and claims repayment of any income tax deducted at source, by including it in the claim submitted to HMRC Repayments (annual returns and tax claims). Claims in respect of insurance products are made by the insurance company or friendly society providing insurance cover (who may be different to the provider).
Any person can make subscriptions into a child’s JISA, and the only amounts that can be withdrawn prior to the child’s 18th birthday are to meet certain provider management charges and other specific expenses, or where the child is terminally ill. Should the child die before they reach 18 the JISA will close and the investments will become part of the child’s estate. In all circumstances other than death or terminal illness of an account holder (or when a £nil balance arises because a JISA has been opened and a small initial investment has been made, but contributions then stop and agreed charges then bring the balance down to £nil), a JISA must run until the account holders 18th birthday, although – as with ‘adult ISAs’ - accounts can be transferred between account managers.
There is no specific stakeholder JISA and there is no need for account managers to offer lifestyling but providers can develop and offer these types of products if they want to.
The detailed rules for JISAs are contained within the Individual Savings Account Regulations 1998 No.1870, and subsequent Amendment Regulations.
Who can provide JISAs
As the JISA is a type of ISA, any person approved to provide ISAs will automatically be able to offer a JISA - see (the ISA manager). All of the ISA approval rules apply and the only additional requirement is that an ISA provider offering JISA accounts must:
publicise details of the minimum amounts they will accept as JISA subscriptions and the methods of payment they accept
inform persons proposing to subscribe to a JISA that the subscription is a gift - see who can subscribe to a JISA
These requirements can be met by the account provider publishing the relevant details in their account publicity and literature, such as the account ‘key features’.
The same conditions and processes regarding HMRC approval of managers, requirements in relation to non-UK account managers, providers ceasing to offer accounts; and HMRC’s withdrawal of approval to offer accounts, apply to JISA as they apply to ‘adult’ ISAs.
Any institution approved by HMRC to offer ISAs can choose whether or not to offer JISAs. Approved ISA providers can also choose to offer JISAs only, or cash or stocks and shares JISAs, only and not to any other ISA products.
Cash and stocks and shares
A JISA, like the ISA, can be offered as either a cash account or a stocks and shares account. Although there will be a single overarching subscription limit for both accounts, a cash and stocks and shares JISA held by a child should be separate accounts for statement and correspondence purposes, and may be held with the same or different providers.
A JISA cannot be offered as an innovative finance account.
A ‘shell’ account holding less than one penny - for example where all investments previously held have been transferred to another JISA - is disregarded when considering the ‘one account of each type’ rule, including for the purposes of the account opening declaration.
We understand that stocks and shares JISAs may, depending on the investments held, be subject to the Markets in Financial Instruments Directive (MiFID) and therefore MiFID reporting requirements. If required, further advice should be sought from the FCA.
Means of payment of subscriptions
There are no restrictions or requirements on payment methods for JISA accounts. These will be a matter for the terms and conditions of the account, as agreed between the account manager and registered contact.
There is no requirement to accept any minimum one-off or regular payment subscription. But providers are free to design their products to include minimum subscription limits. Any such features will be a matter for the terms and conditions of the account, as agreed between the account manager and registered contact, and should be published by the provider.
Providers can make charges for management and other expenses as they see fit, subject to other regulatory requirements and the management contract agreed with the registered contact.
A JISA application can only be made by a person aged 16 or over. Where the child is aged 16 or over, either the child or a person with parental responsibility for the child can apply to open the account. Where the child is under 16 only a person with parental responsibility for the child can apply to open the JISA. Where the child is over 16, a person holding a registered Lasting Power of Attorney for the child can make the application.
A JISA may also be opened by ‘The Share Foundation’ for a child who has been looked after by a Local Authority for a continuous period of at least 12 months commencing after 2 January 2011. For JISA purposes, The Share Foundation is treated as having parental responsibility for the child.
The person applying for a JISA must be aged 16 or more, and for example could be:
- the child who will hold the account
- the child’s natural parent
- a person who has legally adopted the child
- a person who has been granted parental responsibility by the Courts
- a Local Authority that has parental responsibility for a child in its carer
- The Share Foundation
An account can still be opened for a child by a person with parental responsibility, even if the child is over 16, and therefore entitled to apply for an account themselves.
Providers should accept that an applicant has parental responsibility unless they suspect that this is not the case, in which case they should ask for proof. Proof would include the name of the applicant on the child’s birth certificate, or a court order awarding parental responsibility. A person married to the child’s mother at the date of birth of the child also has parental responsibility, so sight of the marriage certificate would establish this. An account manager may accept any such proof offered at face value, but should not open an account if they believe that any document presented to prove parental responsibility is incorrect.
Where the application is made by The Share Foundation, the provider does not need to seek further proof or information.
There are certain conditions that must be satisfied before the JISA can be opened, and the JISA can only be opened when all the conditions are met (in any order). These conditions are:
the applicant enters into an agreement with the provider for the management of the JISA which includes the declaration and application referred to below
where there is a pre-contractual right to withdraw (as opposed to cancellation rights), the period for withdrawal has expired, and
where the application is not in writing, the applicant has agreed, or is treated as having agreed, a copy of the declaration
The information, declarations and authorisations required for the opening of a Junior ISA are only required at account application, and do not need to be renewed annually. However, it will be necessary to obtain new information, declarations and authorisations subsequently as part of an application for a new registered contact for the account.
The application can be made in writing, over the internet, by fax or by telephone.
Providers may refuse an account application as they see fit. An account manager may accept any information or declaration offered by the account applicant at face value, but should not open an account if they believe that any of the information given by the applicant is untrue.
Simplified Due Diligence will apply to the opening of a JISA so full Money Laundering checks are not required on the child or the applicant for the JISA.
Where a provider offers cancellation rights it is only the person who is making the application (FCA use, the ‘consumer’) that can exercise the right to cancel. Any sum returned must be paid to that person. Further details can be found in the FCA Conduct of Business Sourcebook (COBS).
JISA applications in writing
Applications in writing must be made on an application form. Providers should produce their own application forms, which must contain the information, declaration and authority set out below. Providers may use the wording in the specimen application form.
Applications in writing must be signed by the applicant.
Applications must contain:
- the applicant’s title, if any, full name - which does not have to include a middle name or initial - so an application showing Mr John Joseph Bloggs, Mr John J Bloggs or Mr John Bloggs is acceptable but Mr J J Bloggs or Mr Bloggs is not, for looked after children, the applicant may be The Share Foundation
- the applicant’s permanent residential address, including postcode - where the Applicant is The Share Foundation, this will be the address of their registered office
- the child’s title (if any), and full name
- the child’s permanent residential address, including postcode - where the Applicant is The Share Foundation, this will be the address of their registered office
- the child’s date of birth
- if the child is aged over 16, their National Insurance number (if they have one)
Providers may use the wording in the specimen form.
An application that does not contain the applicant’s name and address, and the child’s name and address is incomplete. The provider can either:
- return the application form to the applicant for full completion
- retain the incomplete application and obtain the missing information by letter, fax, email or telephone at which point the account can be opened
The application must specify that the child will be the beneficial owner of the investments held in the JISA.
An account manager may accept information provided in an account application at face value, but should not open an account if they believe that any information provided at account opening is incorrect.
Provided the child’s address is used for reporting purposes (see returns of information), providers can use the registered contact’s address - if this differs from the child’s address - for correspondence purposes.
Applicants must make a declaration on the application. The following details are required in the declaration:
- the applicant is over 16 and is the child, or has parental responsibility for the child, who will hold the JISA
- the application is to open a cash JISA or a stocks and shares JISA - whichever is appropriate
- the personal details are true
- the child who will hold the JISA does not hold a Child Trust Fund
- the child who will hold the JISA is either
- resident in the UK
- a UK Crown servant
- married to or in a civil partnership with a UK Crown servant
- a dependent of a UK Crown servant
- the applicant is the person who will be the first registered contact for the account
- if the application is for a stocks and shares JISA that
- the applicant has not subscribed to another stocks and shares JISA for the child
- is not aware of any other stocks and shares JISA held by the child
- if the application is for a cash JISA that
- the applicant has not subscribed to another cash JISA for the child
- is not aware of any other cash JISA held by the child
- if the application is for a cash JISA that
- the applicant has not subscribed to another cash JISA for the child
- is not aware of any other cash JISA held by the child
- as far as the applicant is aware, subscriptions made to any other JISA for the child in the year have not exceeded the annual subscription limit
- the applicant will not knowingly make subscriptions that will result in the annual subscription limit being breached
For the purposes of this declaration, any account containing a £nil balance following the transfer of investments to another JISA may be disregarded.
Declarations must also contain an agreement by the applicant to the JISA terms and conditions and where the application is in writing, the applicant’s signature.
An account manager may accept information provided in an account opening declaration at face value, but should not open an account if they believe that any declaration provided at account opening is incorrect.
A single declaration by The Share Foundation in respect of multiple account opening declarations may be accepted provided there is an audit trail from each account/application to the declaration.
Applications must include an authority for the provider to manage the account on behalf of the child. The following authority will satisfy the requirements of the regulations.
‘I authorise (provider’s name) to hold the subscriptions, JISA investments, interest, dividends and any other rights or proceeds in respect of those investments and cash, and to make on the child’s behalf any claims to relief from tax in respect of JISA investments.’
If the JISA is a cash JISA invested in a deposit account, alternative wording could be used, such as ‘to hold my cash subscriptions and any interest earned on those subscriptions’.
The authority continues until it is replaced following a change in registered contact, or the account is transferred to another provider. If the existing registered contact ceases to be the registered contact, the previously given authority continues until replaced as part of the normal application process for registered contact status.
A single authority by The share Foundation in respect of multiple account opening authorities may be accepted provided there is an audit trail from each account/application to the authority.
The management agreement
All JISAs must be managed in accordance with the ISA/JISA rules, and under terms agreed between the registered contact, on behalf of the child where appropriate, and the provider.
The management agreement must include instructions to the provider as to the way in which any subscriptions are to be invested.
Where an account applicant is between the age of 16 to 18, whether they are the child who will hold the account, or a parent applying for an account for their child, any management agreement for the account has effect as if the account applicant was 18 years old or over.
JISA applications not in writing
Where an application is made other than in writing; for example, by telephone, unsigned email or fax, or orally, the investor is required to provide the same information, make the same declaration and provide the same authority and other information as for a written application. The investor’s signature is not required. A telephone checklist is available.
On receipt of the application, the ISA manager must make a ‘written declaration’ and notify the applicant of its contents. Notification can be done in one of several ways:
- if the application is made over the phone, or in face-to-face contact, the declaration can be read back to the applicant as part of the application process
- if the application is made over the internet, a copy of the declaration can be relayed back to the applicant as part of the application process
- in all cases, a copy of the declaration can be emailed, faxed or posted to the to the applicant
If the declaration is relayed back to as part of an internet application, the applicant should be given the option to print or save a copy.
The application is valid from the date the ISA manager creates the declaration. On notifying the applicant of its contents, which should take place within 5 business days of the date on which the declaration is created, the ISA manager should advise the applicant that he or she should notify any corrections to the ISA manager.
Notifications of corrections need not be made in writing.
Where corrections are notified the ISA manager must amend the declaration. The amended declaration will take effect from the date on which the original declaration was created.
However it is different where application is made in respect of a child aged 16 or over and the applicant declared that the child did not have a National Insurance number. If the manager becomes aware that the child did have a National Insurance number when the application was made, the manager should update the information held on their system to include this.
Applications made through third parties
An application can be made by the registered contact through a third party such as an Independent Financial Adviser (IFA).
Where the application is made in writing it must be signed by the applicant and passed on to the provider. In the case of applications other than in writing, providers can act on a telephone call, electronic message, fax etc from a third party only if they have no reason to believe that the third party is doing anything other than passing on the application made by the registered contact.
Where applications other than in writing are passed on by a third party, providers must make a written declaration on behalf of the applicant in the same way as an application not in writing. Notification can be given in one of several ways:
- the declaration can be read back to the applicant (not the IFA) over the phone, or face to face contact
- a copy of the declaration can be sent back via email or the internet
- a copy of the declaration can be faxed or sent by post
JISA terms and conditions
A JISA is a type of ISA managed in accordance with the ISA regulations by the provider under terms agreed between the provider and the registered contact. The JISA must be held in the name of the child.
In most respects, JISA terms and conditions are a matter for agreement between the provider and registered contact. However, these terms and conditions must meet the conditions set down in JISA legislation (as set out in this guidance), and must specify that:
- the JISA investments shall be in the beneficial ownership of the child
- except for cash deposits, National Savings products and certain insurance policies (see below), the title to the JISA investments will be registered
- in the name of the provider
- in the name of the provider’s nominee
- jointly in one of them and the child or registered contact
Where a share certificate or other document evidencing title to a JISA investment is issued, it will be held by the provider or as the provider may direct.
Where insurance policies are with an insurer who is also a provider, the title to the policies shall be vested in the registered contact, and the policy document or other document showing title to the insurance policy shall be held by the registered contact.
For a stocks and shares JISA, the provider will arrange, if the registered contact elects, for the registered contact to receive a copy of the annual report and accounts issued by every company or other concern in respect of shares. A separate charge may be levied for this service. The provider will also arrange, if the registered contact elects, for the registered contact to:
- attend shareholders’, securities holders’ or unit holders’ meetings
- receive, in addition to the annual report and accounts, any other information issued to shareholders, securities holders or unit holders
A separate charge may be levied for these services.
The provider will satisfy himself that any person to whom he delegates any of his functions or responsibilities under the terms agreed with the registered contact is competent to carry out those functions and responsibilities.
On the instructions of the registered contact and within the time stipulated by them, the JISA with all rights and obligations shall be transferred to another provider.
In addition, the provider may place a minimum period on the time stipulated by the registered contact for transfer. This period must not exceed 30 days, and should represent a reasonable period required for practical implementation of the transfer. Refer to the timescale for cash ISA transfers (which also applies to cash JISA to cash JISA transfers). Cash JISA managers do not need to mention the investor’s right to stipulate the transfer timescale as long as the 5 day transfer out period is quoted. This will also apply to cash JISA to stocks and shares JISA transfer if the cash JISA manager adopts the 5 day period for these transfers too.
The provider must notify the registered contact if, by reason of any failure to satisfy the provisions of the JISA regulations, a JISA has, or will, become void.
Enquiries and further advice
Providers may use the wording in the specimen application forms. HMRC can be contacted by email and will be pleased to help on points of difficulty and advise in cases of doubt on whether application forms and/or JISA terms and conditions meet the statutory requirements.
Completion of applications
Providers should ensure that applications are fully completed.
Providers do not have to accept any application if they do not wish to do so. For example, providers may only offer accounts for children within a particular age range. Applications should contain the applicant’s address, including postcode. However where the applicant prefers to use a BFPO, ‘PO Box’ or ‘care of’ address for correspondence this is acceptable for JISA purposes.
A JISA cannot be opened on a provisional basis. If some of the information required to complete the application form is not available, the application should be refused until the missing details are supplied. Applications made in writing must contain the signature of the applicant and must be dated. If the application is signed but not dated, the provider can date stamp the application on the date of receipt and note that they have done so.
Imaging application forms and written declarations
Application forms and declarations, transfer forms and registered contact applications can be stored in an imaged form (which need not be in colour), and the originals destroyed. The optical images will be regarded as applications for the purposes of the JISA rules provided that both:
- the imaged document (and any hard copy printouts) is legible
- on being required to do so by HMRC, the provider will, within a reasonable time, provide a hard copy of the imaged documents
Model application forms
Retention of forms
Managers must retain the written application form or an imaged copy of it. As an alternative to retaining the written form, the manager can apply the not in writing procedures when they receive a written application. The manager must make a written declaration using the information provided on the form and send this to the investor. The original paper declaration can then be destroyed.