Answers · UK 2025/26
Are Junior ISA returns tax-free UK?
Yes. All interest, dividends and capital gains earned inside a Junior ISA (JISA) are completely free of UK Income Tax and Capital Gains Tax for the child. The 2025/26 annual JISA allowance is £9,000, and the money is locked away until the child turns 18, when the JISA converts into an adult ISA.
Full answer
A JISA can be a cash JISA, a stocks and shares JISA, or one of each — but the combined contributions across both must not exceed £9,000 in a tax year. Anyone can contribute (parents, grandparents, family friends) but only the registered contact (usually a parent or guardian) can open and manage the account. The child takes over from age 16 but cannot withdraw until 18. Tax treatment: no Income Tax on interest, no dividend tax, no CGT on growth, and crucially the £100 parental settlement rule that taxes parents on a child’s unwrapped interest does not apply to JISAs. Worked example: contributing £200/month from birth into a stocks and shares JISA averaging 7% net annual return produces roughly £85,000 by age 18 — entirely tax-free. At 18 the pot converts automatically into an adult ISA, retaining its tax-free status and the child can transfer it, withdraw, or continue contributing within the £20,000 adult allowance. Child Trust Funds (closed to new accounts) can be transferred into a JISA.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.