Helping our student daughter

[Deleted User]

We are careful with money and not wealthy.
Our daughter has just started an arts degree.
My husband is a teacher and I am self employed in the arts.

We are within 5 years of retirement age (though I'll probably go on working) and would like our daughter to have the opportunity to offset her student loan with the equivalent in an ISA.

We think it's a shame that you can't get tax relief on money given to student offspring. Covenants for students no longer have the tax break.

If as a self employed person, I give her work also as self employed, I would be able to call the money I pay her a legitimate business expense, wouldn't I?
Could she, as a student and self employed, claim any money she spends on materials, books, her course, travel, etc as a legitimate business expendse against the money that I pay her? The student loan isn't taxable.
Please send to another forum if this isn't the right place. Thanks

jennifernil

I think she can only claim relief on any expenses involved in actually carrying out the work she does for you.

If she works only for you then HMRC may not accept that she is self employed.

She will need to register as SE, but I am sure you know that anyway.

I think you should ask these questions on the Tax forum, but what you are proposing could sound slightly dubious to HMRC.

There is nothing stopping her getting a part time job while studying and either saving that money or using it instead of taking such a large loan.

Lokolo

I can't see how she could claim expenses unless its related to the business?

Not sure why you don't just give her the money to save

[Deleted User]

Thank you - that is useful. She has done some work with me already, though paid by a local authority.
I have paid her to be my assistant on larger projects and particularly as I have some physical impairment problems and so it is useful to have someone carry materials and equipment.
She has gained a lot from the work experience.
Working for me is good for her cv and is in the same field in which she wants to make her career. I have had other people work for me but she is very good and it is giving her some useful experience, networks and skills.
I was just trying to think of the most tax efficient way of dealing with this - especially as my husband and I are coming toward the end of our working lives.
I will ask on the tax forum - thanks again

Lokolo

cgw wrote: »

Thank you - that is useful. She has done some work with me already, though paid by a local authority.
I have paid her to be my assistant on larger projects and particularly as I have some physical impairment problems and so it is useful to have someone carry materials and equipment.
She has gained a lot from the work experience.
Working for me is good for her cv and is in the same field in which she wants to make her career. I have had other people work for me but she is very good and it is giving her some useful experience, networks and skills.
I was just trying to think of the most tax efficient way of dealing with this - especially as my husband and I are coming toward the end of our working lives.
I will ask on the tax forum - thanks again

Giving her money doesn't mean she has to pay tax on it you realise?

[Deleted User]

Thanks Lokola

Yes I could just give it to her, but if she did some work for me, I could claim it as business expense and save a bit of tax. She has worked for me already and I have paid her for it - she prefers it so other part time jobs she has had!

thanks

[Deleted User]

Thanks Lokola - I do realise that giving her the money doesn't mean she has to pay tax on it. My income is unpredictable in the current climate so any tax I can save on legitimate business expenses is very useful to my family.