if i lend daughter money for higher education will she pay tax?

arjay1

My daughter goes to do an HNC at uni as a mature student this September, for one year, then - supposing she does well - she will go straight on into degree course.

She understands that she does not get a student loan for the access course but will once she is in a full-time degree course.

She will struggle to find the money for tuition fees and accommodation, so I was going to give her some money at least for the first year. Being independently minded she doesn't want an outright gift, but would like a loan.

My question is - if I loan her £10000 for 4 years will she have to pay tax on the loan?

I realise that if we agree a rate of interest, i will have to declare that and pay tax on the interest, but it is her liability that I am concerned about.

Thanks for any help.

TadleyBaggie

Nope. Even if it was a gift then there would be no tax (assuming you live a further 7 years).

arjay1

Thanks for your prompt and helpful reply

Richard

Emmzi

an HNC is not an access course and I believe will attract a student loan unless she has studied at the same level before. Have you checked with student loans?

Taiko

Indeed, HNC's are designated for funding, in accordance with Schedule 2 of The Education (Student Support) Regulations 2011. No reason why she cannot apply for a fee loan, maintenance loan and grants for this.