Income Tax (Trading and Other Income) Act 2005 section 695A

Investment plans for children

Section 695A provides the legal framework for tax-exempt investment plans for children (such as Junior ISAs), covering who may invest, when withdrawals are permitted, protections for the investments, and how children aged 16 and over may manage their own accounts.

• Income from a child plan may be wholly or partly exempt from income tax, with regulations specifying who can invest on behalf of a child and when withdrawals are allowed
• Investments held in a child plan cannot be assigned, used as security, or passed to creditors if the child is declared bankrupt
• Children aged 16 or over may enter into contracts relating to their child plan (or a plan held by a child for whom they have parental responsibility) as though they were 18 or over
• Where another person makes investments into a child plan on a child's behalf, the child is treated as having made those investments themselves for tax purposes