School Fees

jaykay2009

Need some guidance on the most tax efficient way to allow a godparent to pay for his godson's private education. The godparent has high accumulated wealth and capital assets and income and wants advice on how he can pay for school fees for one or more godchildren in the most tax efficient way. As he is currently giving 50% of whatever he earns to the tax man () what are the options for him? and where can he find out some explanation of how they work (in lay terms). Your help is much appreciated.

pollypenny

The highest tax rate in the UK is 40% and that's on taxable income. I should imagine that he will have ways to avoid tax on all that he earns.

hermanmunster_3

unfortunately it is at least 50% (maybe 60%) now on income over 100k as the personal allowance is lost pound for pound...

I don't know much about tax efficinet ways to pay fees except for advance payment of several years fees in a lump sum for which a discount is then given, the school investing the fees rather than the individaul so you don't pay tax on the interest

Counting_Pennies_2

I know absolutely nothing in this field I'm afraid. The only thing though that I can think about is either childcare vouchers (which I think would cover up to the age of 5 or 6), although I think the person has to be a parent to be saving them through the tax deductable scheme.

Or isn't a private school currently known as a charity. If so is it not possible to give to a charity through payroll, and save the tax on it that way? If so, if you have found the school you want your little one to go to, you could do a deal with the school for the god parent to start paying directly to them to save up a pot for the future.

All totally pie in the sky, but trying to think of ways for you