Mature child trust funds will retain tax advantages

The government had laid final versions of two sets of amending regulations in relation to child trust (CTF) accounts. These will start to mature in September 2020 when the first children reach 18. The regulations come into force from 6 April 2020 and allow investments in such accounts to retain their tax-advantaged status after the account holder’s 18th birthday. They also permit savings to be transferred from a matured CTF to an individual savings account (ISA) without reducing the annual ISA subscription limit.

If, at maturity, no instructions have been received from the account holder on the future of the investments in the fund, the investments will be held in a ‘protected account’ pending instruction. These funds will retain their tax advantaged status, and the terms and conditions which applied before maturity.