Junior NISA tactics

[sutebayashi]

I tried to search the forum for "Junior NISA", but it complains that that search isn't happy so I'm selfishly creating a new topic.

Anyway, I gather that Junior NISA is to be abolished / discontinued after 2023. Ah well.

At the same time, I read that there is a silver lining to this, in that the restrictions on withdrawing funds from the Junior NISA accounts will also be abolished. This article describes it as the merits of Junior NISA being discontinued:
https://kids-money.com/kousi/2020/07/8664.html

Well, whippee! It seems like great news. The adult NISA accounts are already maxed out, and I have been stuffing further investments into a tokutei kouza, but if this is the case with Junior NISA, now I am thinking tactics...

As with iDeCo and NISA, naturally it makes sense to use the Junior NISA allocation for equities related investments.

Yes I hear you say, Junior NISA funds are (in the eyes of the authorities) the possession of young Junior, but young Junior is permitted to gift his parents each 1,100,000 yen a year, I imagine, as the gift tax rules allow for. And so this money becomes accessible again after 3+ years, rather than until the year when Junior turns 18 by March 31st.

So is it not the case that those with kids can use the Junior NISA accounts for the next 3 years for short term investment purposes, and then have Junior gift the money back to them (should they wish) after the Junior NISA is discontinued?

Certainly, there could be an un-timely market crash before 2023 that could spoil the party, but personally I'm going to be continuing with my buy-and-hold for a longer period than that anyways.

I'm thinking to give the kids some Christmas gifts in their NISA accounts.

I am missing anything?

[Kanto]

I tried to search the forum for "Junior NISA", but it complains that that search isn't happy so I'm selfishly creating a new topic.

Anyway, I gather that Junior NISA is to be abolished / discontinued after 2023. Ah well.

At the same time, I read that there is a silver lining to this, in that the restrictions on withdrawing funds from the Junior NISA accounts will also be abolished. This article describes it as the merits of Junior NISA being discontinued:
https://kids-money.com/kousi/2020/07/8664.html

Well, whippee! It seems like great news. The adult NISA accounts are already maxed out, and I have been stuffing further investments into a tokutei kouza, but if this is the case with Junior NISA, now I am thinking tactics...

As with iDeCo and NISA, naturally it makes sense to use the Junior NISA allocation for equities related investments.

Yes I hear you say, Junior NISA funds are (in the eyes of the authorities) the possession of young Junior, but young Junior is permitted to gift his parents each 1,100,000 yen a year, I imagine, as the gift tax rules allow for. And so this money becomes accessible again after 3+ years, rather than until the year when Junior turns 18 by March 31st.

So is it not the case that those with kids can use the Junior NISA accounts for the next 3 years for short term investment purposes, and then have Junior gift the money back to them (should they wish) after the Junior NISA is discontinued?

Certainly, there could be an un-timely market crash before 2023 that could spoil the party, but personally I'm going to be continuing with my buy-and-hold for a longer period than that anyways.

I'm thinking to give the kids some Christmas gifts in their NISA accounts.

I am missing anything?

There were a few posts on this. I do not think you are missing anything, but the exact rules remain unclear.

Regardless, using the J-NISA now seems like a no-brainer if you have maxed-out other Tax-free options.

I will probably consider selling the funds, and rebuying them in my taxable account after the 5 years, just so I have more flexibility.

We put in the max this year. You can lumpsum which is nice.

[fools_gold]

Yes I hear you say, Junior NISA funds are (in the eyes of the authorities) the possession of young Junior, but young Junior is permitted to gift his parents each 1,100,000 yen a year, I imagine, as the gift tax rules allow for. And so this money becomes accessible again after 3+ years, rather than until the year when Junior turns 18 by March 31st.

So is it not the case that those with kids can use the Junior NISA accounts for the next 3 years for short term investment purposes, and then have Junior gift the money back to them (should they wish) after the Junior NISA is discontinued?

Even though the Junior NISA will be discontinued, the funds can still be held tax-free until your child reaches adulthood. Seems a waste to cash it in after just a few years.

Edit: Here's the link to another thread with some useful links.
viewtopic.php?f=2&t=1093

After Junior NISA is discontinued the assets move to a tax-free management account. According to the FSA the assets can then be sold without penalty. It's not very clear as whether you have to sell all or some of the assets. Does anyone else have any more information on this?