Government introduces changes to child trust fund rules
On the 15th of January 2020, the Government announced that they would be changing rules relating to child trust funds. This change means that financial advisors with clients who have a child trust fund will not compromise their general ISA allowance.
Child Trust Funds
Advisors can use tools such as specialist financial advisor software in order to organise assets held. This software, although can be tricky to set up due to its intricacies, enables clients and their families to have a say in how the funds are invested. Clients can also view the accounts to ensure that goals are being met.
This financial advisor software can be the perfect tool for parents or grandparents, who have set up the child trust fund for their family member, to easily check the growth of the child trust fund. Grandparents could use a child trust fund as a way of putting money aside for their loved ones without the deduction of inheritance tax. Parents, who have exhausted their own general ISA allowances, use this method to set money aside for their children’s university fund or as a deposit for their first home.
The change in the law
The laws surrounding child trust funds has changed on the 15th of January 2020. In previous years, the only options available to people who had a fund mature, was to either take the cash or to transfer the money in to another ISA. Transferring the child trust fund would mean that the general ISA allowance for that year would have been compromised, if not completely used up. Information about child trust funds can be found on this website, https://www.gov.uk/child-trust-funds. The change in the law means that advisors can transfer the child trust fund into another ISA without using any of the general ISA allowance for that client in that year. Advisors can find out more about financial advisor software here.
The change in the law means that teenagers can make the best of the money which has been set aside for them. The child trust fund could provide a fantastic start to a client’s adult life, meaning that their university fees could be paid, expensive necessities like driving lessons and a car will be covered and they could be a huge step closer to owning their first property.