Junior NISA

[germanium9]

Hi,
I'm considering to apply for a Junior Nisa account for my son. I'm a little confuse about the tax-free part.
I read in some articles that it's tax free for five years, so some other sources indicate tax free until 18 yrs old.

After Junior NISA ends in 2023, the funds will be transferred to a regular securities account. It will be taxed there?

[sutebayashi]

2023 is the last year of both Junior NISA and the old standard NISA and Tsumitate NISA.

I have Junior NISAs for my kids, and yes, understand that the funds invested in those Junior NISAs will remain tax free until kiddo turns 18 years of age. (But, from next year it will apparently be possible to get the funds out of the Junior NISA at the discretion of the person controlling the account.)

I think it is a good idea indeed to get a Junior NISA for your child, and invest as much of the 800,000 yen tax free that you can this year, and earmark those funds for something useful for your kid once they come of age.

Edit: for the second part - no the funds invested in Junior NISA in 2023 won’t become taxable next year. They will be tax free until kiddo turns 18.

[TokyoBoglehead]

Hi,
I'm considering to apply for a Junior Nisa account for my son. I'm a little confuse about the tax-free part.
I read in some articles that it's tax free for five years, so some other sources indicate tax free until 18 yrs old.

After Junior NISA ends in 2023, the funds will be transferred to a regular securities account. It will be taxed there?

Your confusion is understandable. The rules were changed when the plan was sunsetted so there's lots of conflicting info.

Funds within be tax-free until 18, and won't be restricted for withdrawal unlike a normal taxable minor account.

Basically, after cancellation the plan became much much better retroactively.