In the December 2025 tax reform outline, the creation of the "Children's Support NISA (Kodomo NISA)" — which allows tax-free reserve investing in a child's name — was decided. It is effectively the successor to the "Junior NISA" that ended in 2024, and it is drawing attention as an entry point for building education funds and for financial education. This article organizes, without exaggeration, what has been decided about the system and the tax cautions (especially the gift-tax angle).
The Children's Support NISA is a policy shown in the FY2026 tax reform outline, and its start is planned for January 2027 (in the form of opening the NISA tsumitate (reserve) investment allowance to those under 18)[Ministry of Finance outline (in Japanese)]. The broad framework such as the annual allowance is fixed, but the detailed operational rules will be finalized by legislative amendment and cabinet/ministerial ordinances. Always confirm the latest finalized content with the Financial Services Agency's information[Financial Services Agency (in Japanese)].
Overview of the Children's Support NISA
| Who is covered | Ages 0–17 (under 18 as of January 1 of that year) |
|---|---|
| Start time | January 2027 (planned) |
| Usable allowance | Tsumitate (reserve) investment allowance only (eligible products are investment trusts suited to long-term, reserve, and diversified investing) |
| Annual investment allowance | ¥600,000 |
| Tax-free holding limit | ¥6,000,000 |
| Tax-free period | Indefinite |
| Account operation | An account in the minor's name is operated on their behalf by a person with parental authority |
| Withdrawal | Restricted in principle. Possible from age 12 if requirements such as use for the child and the child's consent are met |
The point that investment gains and dividends become tax-free (normally taxed at about 20%) is the same as the adult new NISA.
Differences from the discontinued "Junior NISA"
The former Junior NISA (new applications ended at the end of 2023) was inconvenient to use and did not catch on. The Children's Support NISA has been improved in light of that reflection.
| Old Junior NISA | Children's Support NISA (planned) | |
|---|---|---|
| Annual investment allowance | ¥800,000 | ¥600,000 (reserve investment allowance) |
| Tax-free period | Fixed term (rollover required) | Indefinite |
| Withdrawal | In principle not allowed until age 18 (mid-term withdrawal treated as taxable) | Possible from age 12 if requirements are met |
| Eligible products | Wide range including listed stocks and investment trusts | Limited to investment trusts eligible for the reserve investment allowance |
Tax cautions (this is the important part)
Being able to invest tax-free is appealing, but as a tax site we ask you to always keep in mind the "who provides the funds" = the gift issue.
When a parent puts funds into an account in the child's name, it is in principle a gift from parent to child. The basic exemption for calendar-year taxation is ¥1.1 million a year, so within the range of the Children's Support NISA (¥600,000 a year), gift tax normally does not apply[National Tax Agency No.4402 (in Japanese)]. However, if the total combined with other gifts exceeds ¥1.1 million a year, it becomes subject to gift tax (see the ¥1.1 million gift-tax exemption).
Even if it is in the child's name only in form, assets that the parent effectively uses freely may, for tax purposes, be regarded as the parent's property (a nominal deposit) and become subject to tax in a future inheritance. It is important to manage it as funds for the child and to make the fact of the gift (given / received) clear.
How to think about using it
- First organize your household's priorities: after securing emergency living funds and the parents' own new NISA / iDeCo, use surplus funds.
- Use it long-term as part of education funds: it suits long-term operation of around 18 years. Do not force yourself to fill the allowance.
- As an opportunity for financial education: make use of the mechanism requiring the child's consent as an entry point for learning about money.
- Investment carries risk: principal is not guaranteed and values can fall. For funds you will use soon, also combine safe assets such as deposits and savings.
FAQ
When can the Children's Support NISA be started?
It is planned to start in January 2027 (in the form of opening the NISA reserve investment allowance to those under 18). It is at the policy stage shown in the outline, and the details will be finalized by future legislative amendment and cabinet/ministerial ordinances.
How much can be invested?
The plan is ¥600,000 a year, with a tax-free holding limit of ¥6,000,000. Only the reserve investment allowance can be used, and eligible products are investment trusts suited to long-term, reserve, and diversified investing.
Is gift tax charged on money a parent puts in?
It counts as a gift from parent to child, but because the basic exemption for calendar-year taxation is ¥1.1 million a year, within the ¥600,000-a-year allowance no gift tax normally applies. It becomes taxable if the total combined with other gifts exceeds ¥1.1 million. Manage it as funds for the child so it is not regarded as a nominal deposit.
Can it be withdrawn partway?
There are restrictions in principle, but from age 12 withdrawal is planned to become possible if requirements such as use for the child and the child's consent are met.
Summary
Reference links (sources)
This article is based on the following official materials (the FY2026 tax reform outline and Financial Services Agency-related materials) (neutral, primary sources). Because it is at the policy stage, always confirm the latest finalized content before using it.
- Financial Services Agency — NISA special website (in Japanese)
- Financial Services Agency — On the FY2026 tax reform (key items related to the FSA in the tax reform outline) (in Japanese)
- Ministry of Finance — Outline of the FY2026 tax reform (in Japanese)
- National Tax Agency No.4402 — When gift tax applies (calendar-year taxation) (in Japanese)
* This article is general information and is not investment solicitation or tax advice. Investment carries risk. Confirm the latest system with official information from the Financial Services Agency and others.