Gifting to Grandchildren

Siskin

MIL has excess income each month and would like to gift appx £100.00 x5 each month

She is 85

IHT is not an issue

The grandchildren are direct beneficiaries in her Will

She is living independently in her own home.

The gifts would be out of her income not her assets/capital.

Are there any other implications we should be aware of?

Biggles

I'm doing it via a Children's Investment Plan with F&C in a bare trust.

This gives them growth without access until age 18, as opposed to the current low savings rates.

http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/childrens-investment-plan/

Siskin

A good idea Biggles but her grandchildren are all over 18.
We would like to restrict them to using it only towards the purchase of a house but not sure how we could do that?

Savvy_Sue

Siskin wrote: »

A good idea Biggles but her grandchildren are all over 18.
We would like to restrict them to using it only towards the purchase of a house but not sure how we could do that?

That's the thing about a gift: once you've given it, you don't have control. You can express hopes and recommendations, but if they're over 18 then unless the money is paid into an account which limits withdrawals then there's nothing to stop them spending it on fast cars - and even then, they can just close the account.

MIL could make it clear that if the money isn't saved, then she will stop giving.

Also, what if one of them really needs the money for something else? For example, gets a job which needs them to have a car, and they can't afford one? "Sorry, no, give up that job because you've got to keep granny's money for a house."