There are now many options for investing on behalf of children, but one stands out as an obvious starting point.

The Junior ISA (JISA) is very similar to its adult counterpart, other than the maximum contribution limit, which in 2015/16 is £4,080. It offers the same tax freedoms – no UK income tax on interest or dividends (although dividend tax credits cannot be reclaimed) and no capital gains tax. Importantly, the rules which can tax parents on the income of capital gifts to their minor children do not apply to JISAs.

Since 6 April 2015 it has also been possible to transfer from existing Child Trust Funds (CTFs) to JISAs, a move which can be beneficial both in terms of broadening investment choice and reducing costs.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.