jNISA mishap advice

[RetireIn10]

Hi friends. I made a stupid mistake in my son's (3yo) JNISA account and am asking for advice.

Long story short, I was re-balancing his JNISA account in October 2023 and had a surplus of 190k in the account. I had already reached the maximum allocated 800k for the year, so this 190k can't be used anymore and is now sitting in the account and is restricted until he's 18 (or I cancel the JNISA account).

What I'm asking for advice on: Should I wait another 15 years and let that money sit there (potentially losing about 8%-12% a year). Or close the account and invest the money elsewhere? I've maxed out my Shin NISA for this year and can max it out every year.

Thank you in advance.

[RetireJapan]

You can invest it in his junior taxable account (tokutei) and then when he's 18 he can sell it and put it in an adult NISA account.

[beanhead]

You can invest it in his junior taxable account (tokutei) and then when he's 18 he can sell it and put it in an adult NISA account.

I think that once the cash is moved into the Junior NISA account from the tokutei, you cannot move it back.
It seems to be possible to sell the assets in a junior NISA account, or close the account, but not take any cash from it until the child is 18 if the account is still open.
That is the way my account looks, anyway.

[RetireJapan]

You can invest it in his junior taxable account (tokutei) and then when he's 18 he can sell it and put it in an adult NISA account.

I think that once the cash is moved into the Junior NISA account from the tokutei, you cannot move it back.
It seems to be possible to sell the assets in a junior NISA account, or close the account, but not take any cash from it until the child is 18 if the account is still open.
That is the way my account looks, anyway.

I will have to check!

[Tsumitate Wrestler]

You can invest it in his junior taxable account (tokutei) and then when he's 18 he can sell it and put it in an adult NISA account.

I think that once the cash is moved into the Junior NISA account from the tokutei, you cannot move it back.
It seems to be possible to sell the assets in a junior NISA account, or close the account, but not take any cash from it until the child is 18 if the account is still open.
That is the way my account looks, anyway.

I will have to check!

Junior NISA after 2024

You will be able to freely withdraw products such as stocks and investment trusts that you own, and withdraw cash to your bank account *3 without tax. However, if you wish to make tax-free withdrawals before reaching the age of majority, you will need to withdraw all of the products and cash held in your Junior NISA account and close your Junior NISA account. It is not possible to sell and pay out only a portion, or withdraw part of the dividends received or the cash pooled by selling, and use the rest as is in Junior NISA.

Withdrawals can be made tax-free after January 1st of the year in which the account holder turns 18 years old on March 31st of the year.
Unless the account is closed due to unavoidable reasons such as a disaster, past dividends, capital gains, etc. received tax-free will also be taxed.
Withdrawals to your registered financial institution account require a specified number of days for withdrawals from tax-exempt accounts, closing procedures for Junior NISA accounts, selling products, and withdrawing sales proceeds.

https://www.sbisec.co.jp/ETGate/?OutSid ... r2024.html

[smalldog]

For what it’s worth Retirein10 I did the same error in my daughter’s account - I’ve made peace with the fact that she has a very nice JPY 150,000 cash position waiting for her in 17 years time. Who needs a piggy bank anyway?

[beanhead]

Junior NISA after 2024

You will be able to freely withdraw products such as stocks and investment trusts that you own, and withdraw cash to your bank account *3 without tax. However, if you wish to make tax-free withdrawals before reaching the age of majority, you will need to withdraw all of the products and cash held in your Junior NISA account and close your Junior NISA account. It is not possible to sell and pay out only a portion, or withdraw part of the dividends received or the cash pooled by selling, and use the rest as is in Junior NISA.

Withdrawals can be made tax-free after January 1st of the year in which the account holder turns 18 years old on March 31st of the year.
Unless the account is closed due to unavoidable reasons such as a disaster, past dividends, capital gains, etc. received tax-free will also be taxed.
Withdrawals to your registered financial institution account require a specified number of days for withdrawals from tax-exempt accounts, closing procedures for Junior NISA accounts, selling products, and withdrawing sales proceeds.

https://www.sbisec.co.jp/ETGate/?OutSid ... r2024.html

There we go. That explains it then.
By the way, the part I have added bold to is, I believe, from the rules until 2023. From 2024 there is no paying back of tax if you decide to sell or close the account, even before 18.

[adamu]

Is this statement on the wiki incorrect?

The investments can remain invested tax free until the child turns 18, even after 2023.
No withdrawals in principle until 18… however, when the JNISA ends in 2023, funds will be transferred to a regular securities account, where withdraws are permitted.

https://retirewiki.jp/wiki/Junior_NISA

I've not been following but if somebody who knows what they're talking about could update it, Karma will shine down upon you.

[Tsumitate Wrestler]

Is this statement on the wiki incorrect?

The investments can remain invested tax free until the child turns 18, even after 2023.
No withdrawals in principle until 18… however, when the JNISA ends in 2023, funds will be transferred to a regular securities account, where withdraws are permitted.

https://retirewiki.jp/wiki/Junior_NISA

I've not been following but if somebody who knows what they're talking about could update it, Karma will shine down upon you.

Yes, it's incorrect. Funds will not be transferred, but will remain tax free until the the age of 18.

At 18 the funds will be dropped into a taxable. No rollovers.

You can now sell and withdrawal the funds before 18. But not partially. It's all or nothing.

*Basically don't touch it and it's still tax-free until 18.*

[adamu]

Is this statement on the wiki incorrect?

Yes, it's incorrect.

Thanks. I've removed the statement for now (other editors can improve it if they wish).