Giving a present.

[Drahcir]

So perhaps £4,000 in a cash LISA now, £2,000 in a "stocks and shares" ISA, and the balance at the end of next year. Would that work? The element of surprise will be rather lost, but I don't know whether there's a better way.

[stevensfo]

It always annoys me that parents are perfectly and legally able to pay for the university fees and living expenses without HMRC batting an eyelid, yet suddenly, you have to be careful what you give to your children?

Probably why you never hear of any legal problems in the press. Interfering with what parents can and can't give their kids is like someone messing with a lioness and her cubs!

If really worried, just give them wads of cash while they save, wait for them to get a place of their own, then buy all the furniture, HiFi, helicopters, redecorating that they want.


Steve

[Lootman]

It always annoys me that parents are perfectly and legally able to pay for the university fees and living expenses without HMRC batting an eyelid, yet suddenly, you have to be careful what you give to your children?

Probably why you never hear of any legal problems in the press. Interfering with what parents can and can't give their kids is like someone messing with a lioness and her cubs!

If really worried, just give them wads of cash while they save, wait for them to get a place of their own, then buy all the furniture, HiFi, helicopters, redecorating that they want.

The thing is that the discovery of IHT-eligible gifts is generally not done by the taxman, but rather by an executor. And that executor is probably not going to be too zealous about gifts that are not large cash transfers with a paper trail. He will just see purchases on a card and think little about them.

Presumably the government turns a blind eye to this, since otherwise they could choose to tax gifts in a different way, as they arise.

[Bouleversee]

I have been paying towards grandchildren's school fees for years but am now very unlikely to live for another 7 years. Will those within 7 years of my death be subject to IHT, whether they come out of surplus income or not? What about university fees or expenses? One is already at Uni and two more will follow (hopefully!) in the Autumn. Can someone explain the bit about lowering your standard of living. I do consider downsizing but that might well improve my standard of living in terms of having time to have a life and avoidance of the stress of maintaining a property if in an assisted living apartment. The same question applies to contributions to J/ISAs/

[Gerry557]

It always annoys me that parents are perfectly and legally able to pay for the university fees and living expenses without HMRC batting an eyelid, yet suddenly, you have to be careful what you give to your children?

Probably why you never hear of any legal problems in the press. Interfering with what parents can and can't give their kids is like someone messing with a lioness and her cubs!

If really worried, just give them wads of cash while they save, wait for them to get a place of their own, then buy all the furniture, HiFi, helicopters, redecorating that they want.


Steve

Yes I had a difficult conversation with a university who stated that the individual was an adult blah blah blah. So why are you asking me for monies then!

[DrFfybes]

It always annoys me that parents are perfectly and legally able to pay for the university fees and living expenses without HMRC batting an eyelid, yet suddenly, you have to be careful what you give to your children?

Probably why you never hear of any legal problems in the press. Interfering with what parents can and can't give their kids is like someone messing with a lioness and her cubs
Steve

I would hope funding your children's education is regarded as supporting a dependant, and comes as normal expenditure out of income. Giving them lump sums to squirrel away in later life is different.

Paul

[Dod101]

It always annoys me that parents are perfectly and legally able to pay for the university fees and living expenses without HMRC batting an eyelid, yet suddenly, you have to be careful what you give to your children?

Probably why you never hear of any legal problems in the press. Interfering with what parents can and can't give their kids is like someone messing with a lioness and her cubs!

If really worried, just give them wads of cash while they save, wait for them to get a place of their own, then buy all the furniture, HiFi, helicopters, redecorating that they want.


Steve

No one is interfering with what you can and cannot give your kids. You have a duty as a parent to support your children but come to think of it I do not know if there is any definition of when that ceases. Anyway there is nothing in law to stop you supporting adult children, just that at some point in the hopefully unlikely event of the parent's early death there may be some liability for IHT but that depends firstly on the parent being liable for IHT, secondly the gift (as that support would presumably be called) being large enough to fall within the IHT rules and thirdly HMRC being advised of it. As you must know there are many exemptions anyway so being liable cannot happen all that often.

Dod

[stevensfo]

It always annoys me that parents are perfectly and legally able to pay for the university fees and living expenses without HMRC batting an eyelid, yet suddenly, you have to be careful what you give to your children?

Probably why you never hear of any legal problems in the press. Interfering with what parents can and can't give their kids is like someone messing with a lioness and her cubs!

If really worried, just give them wads of cash while they save, wait for them to get a place of their own, then buy all the furniture, HiFi, helicopters, redecorating that they want.


Steve

No one is interfering with what you can and cannot give your kids. You have a duty as a parent to support your children but come to think of it I do not know if there is any definition of when that ceases. Anyway there is nothing in law to stop you supporting adult children, just that at some point in the hopefully unlikely event of the parent's early death there may be some liability for IHT but that depends firstly on the parent being liable for IHT, secondly the gift (as that support would presumably be called) being large enough to fall within the IHT rules and thirdly HMRC being advised of it. As you must know there are many exemptions anyway so being liable cannot happen all that often.

Dod

Yes, I think it's a case of using common sense and 'keeping under the radar'.

A bankrupt Russian oligarch's cruising yacht bought at auction and delivered to our son's flat may arouse suspicions, but not a nice HiFi or holiday paid for by us.

Our eldest son was a bit spoilt and we paid his tuition fees etc, but when our youngest started uni, the fees had shot up so much that he took out a loan, though we still helped with living expenses etc. We like to treat them both the same, so consequently we promised him that we'd help in the future, and we will.

My own Dad used to help out like that when I got married. Leather sofas, furniture, a week in Mallorca, even new tyres for the car etc are incredibly well appreciated when you're young and have barely two pennies to rub together!


Steve

[Bouleversee]

I know a couple who have bought their grandson a car for his 18th. They are pretty old and have health problems. If one or both of them were to die within 7 years, would the cost of that be added to their estate which I know will be above the allowance?

[Dod101]

I know a couple who have bought their grandson a car for his 18th. They are pretty old and have health problems. If one or both of them were to die within 7 years, would the cost of that be added to their estate which I know will be above the allowance?

No one else has responded, but I guess it ought to unless it falls within the many 'let offs' which it probably would.

Dod

[Lootman]

I know a couple who have bought their grandson a car for his 18th. They are pretty old and have health problems. If one or both of them were to die within 7 years, would the cost of that be added to their estate which I know will be above the allowance?

No one else has responded, but I guess it ought to unless it falls within the many 'let offs' which it probably would.

I would have thought so too. However it would be a matter for the executor to determine. If there was no documentation, and the grandson said nothing about it, then I can see how it easily might be missed.

Also, did the grandparents actually buy the car themselves? Or give the grandson the money for it? If the latter then the amount of the cash gift is the important number. But if they gifted the car then I would have thought it is the current depreciated value of the vehicle that matters for the estate.

But then what happens if the grandson has subsequently sold the vehicle?

[Bouleversee]

I know a couple who have bought their grandson a car for his 18th. They are pretty old and have health problems. If one or both of them were to die within 7 years, would the cost of that be added to their estate which I know will be above the allowance?

No one else has responded, but I guess it ought to unless it falls within the many 'let offs' which it probably would.

I would have thought so too. However it would be a matter for the executor to determine. If there was no documentation, and the grandson said nothing about it, then I can see how it easily might be missed.

Also, did the grandparents actually buy the car themselves? Or give the grandson the money for it? If the latter then the amount of the cash gift is the important number. But if they gifted the car then I would have thought it is the current depreciated value of the vehicle that matters for the estate.

But then what happens if the grandson has subsequently sold the vehicle?

Really? I should have thought it was the purchase price of the car if they bought it or otherwise the amount of cash donated that was relevant but whether either will be declared in all such cases is another matter. Nobody has answered my 490136 post. I suspect all such payments (outside of allowances)
made within 7 yrs of death are subject to IHT. If PD were still with us, no doubt he would have produced some evidence from an HMRC manual by now.

[Lootman]

I know a couple who have bought their grandson a car for his 18th. They are pretty old and have health problems. If one or both of them were to die within 7 years, would the cost of that be added to their estate which I know will be above the allowance?

No one else has responded, but I guess it ought to unless it falls within the many 'let offs' which it probably would.

I would have thought so too. However it would be a matter for the executor to determine. If there was no documentation, and the grandson said nothing about it, then I can see how it easily might be missed.

Also, did the grandparents actually buy the car themselves? Or give the grandson the money for it? If the latter then the amount of the cash gift is the important number. But if they gifted the car then I would have thought it is the current depreciated value of the vehicle that matters for the estate.

But then what happens if the grandson has subsequently sold the vehicle?

Really? I should have thought it was the purchase price of the car if they bought it or otherwise the amount of cash donated that was relevant but whether either will be declared in all such cases is another matter. Nobody has answered my 490136 post. I suspect all such payments (outside of allowances)
made within 7 yrs of death are subject to IHT. If PD were still with us, no doubt he would have produced some evidence from an HMRC manual by now.

The way I was looking at it was this. With a failed PET, its value is added back into the donor's estate for IHT purposes. If the gift was a car then that car is now back in the estate. And the real assets and chattels of an estate are valued at their current market value and not what you originally paid for them.

Could be 100% wrong about that of course.

I am afraid I don't know anything about the rules for regular gifts from income, as I do not use that strategy.

[Drahcir]

You can't invest into 2 S&S ISAs in one tax year, but you CAN invest in a LISA and a S&S (or Cash) ISA in the same year.

Hi, I was looking at that. Is a LISA treated differently from a cash ISA, even if it is a cash LISA?

EDIT: The question being, if one has a S&S LISA and an S&S ISA, is it possible to put money into both in a single year?

[SeagoonN]

Another method of transferring wealth to your son is for you to buy gold coins online that are also UK legal tender eg Brittanias, Sovereigns and Half Sovereigns. Give those coins to your son and he can sell them for cash which he can do anonymously if he walks into a bullion dealer and walks out with the cash. There is no VAT or CGT on the sale of these coins and no reporting requirements.

The only caveat is that your son might want to be accompanied by a big strong friend when he sells the coins for cash!

HTH
Neddy

[Lootman]

Another method of transferring wealth to your son is for you to buy gold coins online that are also UK legal tender eg Brittanias, Sovereigns and Half Sovereigns. Give those coins to your son and he can sell them for cash which he can do anonymously if he walks into a bullion dealer and walks out with the cash. There is no VAT or CGT on the sale of these coins and no reporting requirements.

The only caveat is that your son might want to be accompanied by a big strong friend when he sells the coins for cash!

Why do you recommend buying them online but selling them for cash at a dealer?

Why not buy them for cash at a dealer as well, thereby ensuring that both transactions are anonymous if that is important?

[swill453]

Another method of transferring wealth to your son is for you to buy gold coins online that are also UK legal tender eg Brittanias, Sovereigns and Half Sovereigns. Give those coins to your son and he can sell them for cash which he can do anonymously if he walks into a bullion dealer and walks out with the cash. There is no VAT or CGT on the sale of these coins and no reporting requirements.

The only caveat is that your son might want to be accompanied by a big strong friend when he sells the coins for cash!

Another caveat is that it will still be a gift covered by the Potentially Exempt Transfer rules.

Scott.

[Lootman]

Another method of transferring wealth to your son is for you to buy gold coins online that are also UK legal tender eg Brittanias, Sovereigns and Half Sovereigns. Give those coins to your son and he can sell them for cash which he can do anonymously if he walks into a bullion dealer and walks out with the cash. There is no VAT or CGT on the sale of these coins and no reporting requirements.

The only caveat is that your son might want to be accompanied by a big strong friend when he sells the coins for cash!

Another caveat is that it will still be a gift covered by the Potentially Exempt Transfer rules.

Perhaps he intends to value the gold sovereigns at their notional value of £1, rather than their melted down value of closer to £400!

After all, their tax exempt status is derived from the fact that they are legal tender

[Dod101]

I know a couple who have bought their grandson a car for his 18th. They are pretty old and have health problems. If one or both of them were to die within 7 years, would the cost of that be added to their estate which I know will be above the allowance?

No one else has responded, but I guess it ought to unless it falls within the many 'let offs' which it probably would.

I would have thought so too. However it would be a matter for the executor to determine. If there was no documentation, and the grandson said nothing about it, then I can see how it easily might be missed.

Also, did the grandparents actually buy the car themselves? Or give the grandson the money for it? If the latter then the amount of the cash gift is the important number. But if they gifted the car then I would have thought it is the current depreciated value of the vehicle that matters for the estate.

But then what happens if the grandson has subsequently sold the vehicle?

Really? I should have thought it was the purchase price of the car if they bought it or otherwise the amount of cash donated that was relevant but whether either will be declared in all such cases is another matter. Nobody has answered my 490136 post. I suspect all such payments (outside of allowances)
made within 7 yrs of death are subject to IHT. If PD were still with us, no doubt he would have produced some evidence from an HMRC manual by now.

I cannot be a PD but if you were/are making regular payments for University fees out of regular income, and that without affecting your standard of living and you can show that that is so, I think there would be a good case for not regarding these payments as falling within the IHT rules and thus there would be no need for these to be reported to HMRC in the calculation of IHT. That is only my opinionthopugh.

Dod

[scrumpyjack]

Maintenance. Although not strictly an exemption, gifts made for the maintenance of family members (i.e. spouse/civil partner, minor children, children in full time education and relatives financially dependent on the person making the gift) are not treated as transfers for IHT purposes so no liability will arise. You could certainly deem much of the 'gifts' described above as being covered by this, and they do not need to have been made out of the donor's surplus income.

re the value of the gift, where it is a PET, it is the diminution of the donor's assets that count as the value of the gift, so the comment about the car - it would be what the car cost the donor.

I would suggest leaving your executor sufficient documentation to show that you have thought about these issues and that amounts given to your grandchildren have not been PETs. Save the executor scrabbling through 7 years of financial records and this gives them something to show they have not been negligent if things do eventually get queried!