JNISA investment in 2023 will allow users to freely withdraw funds after 2024 before the age of 18

[Owly]

Hello again,

Another seemingly tempting opportunity from the Rakuten website for those with kids.

It seems that if you open a JNISA for your kid in 2023 it will be tax free until the kid turns 18 as before BUT: you can freely withdraw the funds any time after 2024 (which was obviously previously not possible). This seems like a golden window of opportunity if the new NISA will not be available for under 18s?

https://media.rakuten-sec.net/articles/-/40106?page=3

[TokyoBoglehead]

Hello again,

Another seemingly tempting opportunity from the Rakuten website for those with kids.

It seems that if you open a JNISA for your kid in 2023 it will be tax free until the kid turns 18 as before BUT: you can freely withdraw the funds any time after 2024 (which was obviously previously not possible). This seems like a golden window of opportunity if the new NISA will not be available for under 18s?

https://media.rakuten-sec.net/articles/-/40106?page=3

This was retroactive for all Junior nISA years.

It made the JNISA a much better deal, in retrospect.

Definitely use it if you have the funds and maxed your own nisa.

My son has 4 years in, I just opened one for my newborn daughter.

[Owly]

Thank you,

I will be opening one or two as soon as possible!

[solo7100]

What would the tax implications of this be for a US citizen child? I know what it is for a working adult (arg), but when my child takes out this money when he is 18, is he also slammed by the US tax system?

[TokyoBoglehead]

What would the tax implications of this be for a US citizen child? I know what it is for a working adult (arg), but when my child takes out this money when he is 18, is he also slammed by the US tax system?

It's fine if it's Japanese single stocks. But don't touch any PFICs like Orix or Softbank.

Don't touch any Etfs or trusts they are listed outside the US. Only Nomura will let Americans buy American stocks or etfs.

Fyi your government will probably not see capital gains as being tax free, but I have no idea how that works.

[solo7100]

Thanks much for that, learning so much in this forum.

Follow up: to set up a JNISA, must a parent already have normal NISA for themselves already, or can they set it up for their child independently?

Thanks,

[beanhead]

Follow up: to set up a JNISA, must a parent already have normal NISA for themselves already, or can they set it up for their child independently?

Thanks,

They must have a brokerage account with the broker you plan to use. The J-NISA is attached to that.
I don't think a NISA account is need specifically. (happy to be proven wrong on this one though).

[RetireIn10]

A related, but different question: My son is 3 years into his JNISA before it gets abolished next year. Do I still have 2 more years of the 5-year JNISA to contribute, or is his JNISA dead in the water? TIA!

[beanhead]

A related, but different question: My son is 3 years into his JNISA before it gets abolished next year. Do I still have 2 more years of the 5-year JNISA to contribute, or is his JNISA dead in the water? TIA!

No more new contributions will be allowed in 2024.
The investments can just be left to grow until the 5 years is up, though.

Each NISA year is a separate entity, so you never had the ability to contribute across years, by the way.
2022 J-NISA could only be funded until the end of December 2022, for example.

[RetireIn10]

A related, but different question: My son is 3 years into his JNISA before it gets abolished next year. Do I still have 2 more years of the 5-year JNISA to contribute, or is his JNISA dead in the water? TIA!

No more new contributions will be allowed in 2024.
The investments can just be left to grow until the 5 years is up, though.

Each NISA year is a separate entity, so you never had the ability to contribute across years, by the way.
2022 J-NISA could only be funded until the end of December 2022, for example.

Thank you for the clarification, beanhead. Still a sad event.