Child Trust Fund
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1. Overview
A Child Trust Fund is a long-term tax-free savings account for children born between 1 September 2002 and 2 January 2011.
Find a Child Trust Fund as a parent or if you are over 16.
The Child Trust Fund scheme closed in 2011. You can apply for a Junior ISA instead.
This guide is also available in Welsh (Cymraeg).
Paying into a Child Trust Fund
You can continue to add up to £9,000 a year to an existing Child Trust Fund account. The money belongs to the child and they can only take it out when they’re 18. They can take control of the account when they’re 16.
There’s no tax to pay on the Child Trust Fund income or any profit it makes. It will not affect any benefits or tax credits you receive.
2. Find a Child Trust Fund
Contact your Child Trust Fund provider directly if you know who the account is with.
If you do not know the provider, you can ask your parent or guardian.
You can also ask HM Revenue and Customs (HMRC) to find a Child Trust Fund provider. They can tell you where the account was originally opened.
Before you start
You’ll be asked for your National Insurance number. You’ll also need your adoption details if they apply.
If you’re a parent or guardian looking for a child’s trust fund, you’ll need:
- the child’s full name, address and date of birth
- any previous names you or the child have used
You can include the child’s National Insurance number if you have it.
You’ll need to complete the form in one go - you cannot save and return to it.
Ask HMRC to find a Child Trust Fund provider
Use this free tool to ask HMRC to find a Child Trust Fund provider. It will not tell you how much money is in a Child Trust Fund.
You can ask HMRC if you’re:
- 16 or over and looking for your own trust fund
- a parent or guardian of a child under 18
There are other free services you can use to find a Child Trust Fund provider, such as the Share Foundation.
What happens next
You’ll get a letter from HMRC with details of the Child Trust Fund provider. You’ll usually get this within 3 weeks of HMRC getting your request, if you apply online. Postal applications will take longer.
If you do not get a response within 6 weeks, you can write to HMRC. Include your reference number if you have one.
Write to:
Charities, Savings and International 1
HMRC
BX9 1AU
3. Managing the account
If you’re the main contact for the Child Trust Fund account you’re called the ‘registered contact’. You have certain responsibilities until the child turns 18, or until the child takes control of their own account.
Your responsibilities as the registered contact
You’re the only person who can:
- tell the account provider how to invest the fund and run the account
- change the address and other personal details
- change the type of account, for example from cash to stocks and shares
- move the account to another provider
Contact your Child Trust Fund provider to do this.
Moving to a different account
You can transfer a Child Trust Fund account to a Junior ISA. Contact a Junior ISA provider to do this.
Records you need to keep
Keep the following paperwork:
- your child’s Unique Reference Number (you’ll find this on your annual Child Trust Fund statement)
- the account statements
- details of the account type and the provider
Change a registered contact
You can change the registered contact to someone with parental responsibility for the child, like a parent, step-parent or legal guardian if both parties agree to this.
Your Child Trust Fund provider can tell you how to change the registered contact of a Child Trust Fund account.
When your child is 16
Once your child turns 16, they can either:
- take over the account by contacting the Child Trust Fund provider
- leave you in charge of the account
4. Adding money to the account
Anyone can pay money into a Child Trust Fund account.
The Child Trust Fund scheme closed in 2011. You can apply for a Junior ISA instead.
How much you can add
You can put up to £9,000 a year into the account - the year starts on the child’s birthday and ends the day before their next birthday.
If you do not use the £9,000 limit, you cannot carry any unused amount over to the following year.
How to pay money in
For stakeholder accounts you can add money by:
- cheque
- standing order
- direct debit
For savings or share accounts, check with your provider.
Government payments
Payments made by the government do not count towards the £9,000, apart from payments made by a local council to a child in care.
5. What happens when your child is 18
On your child’s 18th birthday, the Child Trust Fund matures. This means that:
- your child automatically takes over the account
- no more money can be added
Your child can either:
- take out the money
- transfer the money to an adult ISA
The Child Trust Fund will then close.
Until your child withdraws or transfers the money, it stays in an account that no one else has access to.
If your child lacks the mental capacity to manage their account when it matures
You, or a close friend or relative, need to apply to the Court of Protection (COP) for a financial deputyship order so you can manage your child’s account when they turn 18. Once the account matures, the money can either be taken out or transferred into an ISA.
In Scotland, applications need to be made to the Office of the Public Guardian in Scotland.
In Northern Ireland, applications need to be made to the Office of Care and Protection.
6. Accounts for children in care
Some children looked after by local authorities have a Child Trust Fund account set up on their behalf. The Share Foundation acts as the registered contact for these accounts.
How the account is managed
The Share Foundation manages the Child Trust Fund account for the child and will:
- write to the child when they take control of the account
- change the type of Child Trust Fund account and provider if necessary and write to the child to explain why the change was made
- send account statements to the child
They’ll manage the account until:
- the child turns 18
- the child turns 16 and decides to manage the account themselves
- someone takes parental responsibility for the child, for example through adoption
Take over the management of an account
Contact the Share Foundation if you’re taking parental responsibility for a child and want to manage their Child Trust Fund account.
The Share Foundation can only help if you are a parent of a child who was in care. If you have any other questions about a Child Trust Fund, you should contact the provider of your fund.
You’ll need to provide evidence of parental responsibility, for example an adoption certificate.
You’ll get a letter confirming that you can take over responsibility for the account. Show this to the Child Trust Fund provider who can update the account to say you’re the registered contact.
Share Foundation
Email: info@sharefound.org
Telephone: 01296 310 400
Find out about call charges
1st Floor
Ardenham Court
Oxford Road
Aylesbury
HP19 8HT
When a child in care turns 16
The Share Foundation will write to the child about 2 months before their 16th birthday, telling them how to become the registered contact for the account.
If they choose to take control of the account, they can:
- start managing it when they turn 16
- withdraw money when they turn 18
7. If your child is terminally ill or dies
If your child is terminally ill you can take money out of their Child Trust Fund account. If they die, the money passes to whoever inherits their estate (property and possessions).
If your child is terminally ill
‘Terminally ill’ means they have a disease or illness that’s going to get worse and are not likely to live more than 6 months. Only the registered contact can take money out of the account.
If you live in England or Wales, you have 6 months from the date of your child’s diagnosis to take money out of the account.
If you live in Northern Ireland, you have 12 months from the date of your child’s diagnosis to take money out of the account.
If you live in Scotland, there’s no time limit for taking money out of the account.
What you need to do
Fill in the terminal illness early access form to let HM Revenue and Customs (HMRC) know that:
- your child is terminally ill
- you want to take the money out of the account
You’ll need to provide evidence that your child is terminally ill.
If your child dies
The money in the account will be paid to the person who inherits the child’s estate. This is often one of the child’s parents, but if your child was married, it could be their husband or wife.
If you get Child Benefit for a child who has died this can still carry on for a short time.
What you need to do
Tell the Child Trust Fund account provider. They’ll usually need proof, for example the death certificate.