Students, earnings & capital gains tax
galaxygal
Posts: 4 Newbie
My son will - hopefully - be off to uni in September.
Financially, we've been preparing for university costs for a few years, and also our son has been working all the holidays and weekends to ease the financial load when he starts.
We don't intend to take out a student loan as we have a flexible mortgage with a low interest rate which will be cheaper - only 1.29%.
Our son will continue to work during holidays - which should give him an income of about £6k (under the £8105 allowance for 2012-13). His earnings will pay towards his own fees.
My husband and I will pay the rest (when necessary, using borrowing against our mortgage)
My question is, if we "gift" our son this money - say about £10k per year - will he be taxed on this or will this go against his capital gains tax allowance?
Thank you for considering my question
Financially, we've been preparing for university costs for a few years, and also our son has been working all the holidays and weekends to ease the financial load when he starts.
We don't intend to take out a student loan as we have a flexible mortgage with a low interest rate which will be cheaper - only 1.29%.
Our son will continue to work during holidays - which should give him an income of about £6k (under the £8105 allowance for 2012-13). His earnings will pay towards his own fees.
My husband and I will pay the rest (when necessary, using borrowing against our mortgage)
My question is, if we "gift" our son this money - say about £10k per year - will he be taxed on this or will this go against his capital gains tax allowance?
Thank you for considering my question
0
Comments
-
Gifts themselves are tax free within the UK.
However should you die within 7 year then the money may be considered as part of your estate for IHT.0 -
there is no gift tax in the UK and so you can give any one as much as you want.
although in general gifts may count for IHT purposes if you die within 7 years, there is an exemption for parents giving to their own children who are either under 18 or in full time education.0 -
also need to remember that if the interest rate on your mortgage rises, it could cost you quite a bit more, where the student rate is pegged (to inflation i think) - and also cancelled off if its not all paid by a certain age which wont happen to your mortgage0
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