jNISA mishap advice

[Tsumitate Wrestler]

This is what happens at 18

1)new password is issued (certainly for Rakuten)

2)new NISA is automatically set up in the following January

3)existing junior NISA accounts are left as they are, for the maximum of 5 years.

So an 18-year-old who has previously had junior NISAs will then have a new NISA, a tokutei account, and the legacy junior NISAs when they (or in my case, when I ) look at the account overview.

As discussed elsewhere, for under-18s, their junior NISAs remain, but the only account you can add to until 18 is the tokutei account. There is no tax-advantaged option.

I was 100% unaware of the weird loophole here. Interesting stuff. It was not spelled out in most of the literature I found.

Thank you "that guy".

OK. I know I’m being petty now. But that isn’t gonna stop me..

This:

“3)existing junior NISA accounts are left as they are, for the maximum of 5 years.“

Should ackchyually state.

“ 3)existing junior NISA account years, that are yet to have benefitted from at least 5 years of tax free investment, are left as they are until they reach that five year threshold.”

Can you post that on the wiki? I'm not qualified to touch it.

[RetireJapan]

OK. I know I’m being petty now. But that isn’t gonna stop me..

You are required to set that picture in your profile now

[adamu]

Can you post that on the wiki? I'm not qualified to touch it.

I believe all three of you have accounts. Well, I'm not completely sure because everyone uses a pseudonym and you change your account name here every few months

[Moneymatters]

OK. I know I’m being petty now. But that isn’t gonna stop me..

This:

“3)existing junior NISA accounts are left as they are, for the maximum of 5 years.“

Should ackchyually state.

“ 3)existing junior NISA account years, that are yet to have benefitted from at least 5 years of tax free investment, are left as they are until they reach that five year threshold.”

Haha. We are gonna need to get you a new T-shirt

Yes, your point is correct.
My first ones were created in 2021 so get to that mark at the end of 2025.
Then the little darlings will blow it on yearly passes to Disneyland or new iPhones or whatever

Well. I'm not sure I want to have "That Petty guy" on a T-shirt for risk of being mistaken for Tom..

I've updated the Wiki entry bringing to bear all the English language education i can recall from a school that Ofsted subsequently branded "Inadequate" before it failed special measures and was closed.

BTW, for just 2.8mil yen they could buy 500 shares of the Oriental Land Company and get two one day Disney passes for free!

[beanhead]

BTW, for just 2.8mil yen they could buy 500 shares of the Oriental Land Company and get two one day Disney passes for free!

Bargain!
That is probably touted as a sound investment strategy in some Japanese personal finance book.

[adamu]

That is probably touted as a sound investment strategy in some Japanese personal finance book.

Please share it when you find it

[sutebayashi]

That prompted me to search for 株主優待 at my local library’s website now, and there are tonnes of hits. Might be an amusing read in there…

Then suddenly I wondered, what happens to the shareholder perks when the shareholder is some Toshin-running asset management fund?

[smalldog]

Thank you for your insight everyone. I'm not sure what I will do, but losing out on a potential 120% gain (8%/year x 15 (number of years until my son's 18th bday) seems sad to me. It's a lose-lose, but I'll have to live with my decision.

Did you ever find a solution to this one? I’m in the same boat as you and so frustrating to see this cash sitting in my child’s account that I can’t invest for another 17 years. Grrrr.

[sutebayashi]

It would seem to be a choice of either sucking it up as-is, or switching to kiddo’s taxable account and gaining freedom to invest the extra cash too, for the possible cost of kiddo eventually having capital gains tax to pay.

Which one works out better mathematically, by the time your kid will need/want to do something with the money?
It likely depends on what proportion of the jNISA is stranded in cash.

If going the taxable account route, it might be possible for kiddo to realize under 200,000 yen in profits each year, and avoid the need to file a tax return. (Potentially a useful financial lesson?)

(The FSA might come up with a new scheme for junior investors in coming years, capital gains tax rates may change, but of course those are unknowns…)

[beanhead]

It is quite ridiculous that these simple mistakes can be punished in this way.
Cannot buy anything with the money in the NISA account, and cannot move it out either.

I wonder if this is a government rule for NISA, or if it is the way the securities compaies have interpreted the rules and set up their online systems.