On Oct. 14, UK Treasury issued child trust fund amendment rules.
UK Treasury issued Child Trust Funds (Amendment) (No. 2) Regulations 2024 (StIn 2024/1023) to bring into effect certain fractional interests in a child trust fund (CTF).
Purpose
Amend Child Trust Funds Regulations 2004 (StIn 2004/1450), regulation 8 to specify requirements that fractional interests in shares must meet to be included in a CTF account; provide for when fractional interests must be aggregated into whole shares.
Amend regulation 11 of the 2004 regulations to make provision as to price at which other transactions by way of sale or otherwise, and of fractional interests, to be traded.
The regulations also amend regulation 12 to include fractional interests which meet the prescribed conditions as qualifying investments for a child trust funds account.
Insert new paragraphs (2B), (2C) which prescribe shares, investments which qualify.
The regulations amend the schedule to the 2004 regulations to prescribe accounts which do not directly holds investments in fractional interests in shares in investment trusts or in shares issued by a company officially listed on or admitted to trading on a recognised stock exchange as having the characteristics of a stakeholder account.
Effectiveness
These regulations are in force from Nov. 4, 2024.
Oct. 15, 2024 HMRC Tax Information and Impact Note
On Oct. 15, 2024, UK HMRC issued policy paper on impact and tax details with regard to recent regulation, Child Trust Funds (Amendment) (No. 2) Regulations 2024.
In terms of new applications, measure will allow certain fractional interests in shares (fractional shares) to be held in a stocks and shares ISA and Child Trust Fund (CTF).
Requires managers to get a National Insurance number on new applications from all investors who are eligible to have one, and updates rules on subscriptions.
Specifically transfer of current year subscriptions from one manager to another.
