Can I open a JISA for my grandchild who lives in Spain?
10 March 2021
Question by Ray
I have opened Junior ISAs for each of my grandchildren, which will be invested until they are at least 18. My newest grandchild lives in Spain, and her parents are long-term Spanish residents. Are there any investments which I can take out for her in the UK, and which will be accessible when she comes of age?
Answered by Boring Money
Yes, unfortunately it’s not possible to open a Junior ISA for non-resident children (which allow investments to accumulate free of tax).
Before Junior ISAs (and prior to that, Child Trust Funds) the simplest way of investing on behalf of a child (if you wanted these investments to be held in the child’s name) was through a ‘bare trust’ – this is still an option for grandparents.
Many providers/platforms offer this type of facility i.e. investment accounts for the child with the parent or grandparent as the trustee – often referred to as ‘Junior Investment Accounts’ (JIAs). Whilst these accounts do not benefit from the same tax breaks as a Junior ISA, you are able to use the child’s annual income tax and capital gains tax allowances.
There is also some additional flexibility - these accounts allow you to access the money while the child is still young, so you could use it to save for school fees, for example. Alternatively, the account can stay open beyond the child's 18th birthday. You will remain the account holder (unlike a Junior ISA), however because it's a bare trust, the child will be legally able to request the money.
Normally JIAs can be held in a bare trust for non-resident children (but it’s worth checking this with the providers) - however, the donors/trustees must be UK resident.
I hope this helps I’m afraid I can’t be more specific without a better understanding of your personal circumstances and objectives.