Best way to leave my daughter money after my death

bails1010

Hi everyone. I currently live in a council house in a very expensive area. I’ve been here 17 years Since I had my daughter and was hoping one day to buy this house so I’d have something to leave her when I kick the bucket.  I’m a single parent and emergency services worker so don’t have a lot of money. Even with my council discount I’ve come to realise that I’ll never be able to buy the house so may as well continue to rent it and thank myself lucky that’s it’s council and not private. I thank goodness for that and am very grateful for it. So not having a house to pass on to her I’m thinking that I’ll start now putting money away for her instead. I just wondered if anyone has any ideas as to what is the best way for me to save the money for her? Should I just have a savings account and put in a will that it all goes to her and allow it to be taxed, or is there any way I can maybe have an account in her name and pay I to it, but then would she be taxed on it annually? May sound like a daft question but not having very much disposable income I’ve not really ever had to make any major financial decisions  in my life. Any suggestions would be Appreciated. Thank you  

Alistair31

Respectfully, it sounds like you/she will be below the threshold for inheritance tax to be of concern.

https://www.gov.uk/inheritance-tax

If not and I am wrong, what sort of money are you talking about leaving/finding a home for in the interim?

Gary1984

Do you have an emergency pot saved? Saving 6 months expenditure should be your first priority. Secondly are you a member of your occupational pension scheme?

Once these areas are sorted you may consider paying into a SIPP. This can be used as an additional source of funds in your own retirement but anything left after your death can be passed on to your daughter. The advantage of a SIPP over an ISA or other savings account is that it attracts tax relief.

Look into any Death in Service benefits provided by your workplace. Some employers allow you to increase this provision. If not you could always consider buying some life insurance cover? 

Owain_Moneysaver

bails1010 said:

Even with my council discount I’ve come to realise that I’ll never be able to buy the house so may as well continue to rent it and thank myself lucky that’s it’s council and not private. I thank goodness for that and am very grateful for it. So not having a house to pass on to her

It might be possible to buy the house if your daughter is a joint tenant and on the mortgage (it's not clear if she is or would soon be old enough or able to do that yet). Or she might be able to inherit the tenancy from you, if she is living in the house when you die. Right-to-buy and discount legislation can change, of course, so that opportunity might not be available in the future. 

macman

So how much money per month can you save? The first £1K of savings income is tax free, otherwise use an ISA for the tax relief. Your daughter won't be taxed on anything, and your estate will not pay IHT below £325K.

Albermarle

As explained above it is very unlikely for there to be any issues about tax .
Also as explained , it is easier/better to save in your own name , then you have flexibility of how to use the money and any left  go to your daughter. Do not forget your circumstance might change in future - you might meet a new partner for example. If you got married, then if you died he would inherit everything unless you had a will saying otherwise. Or you might decide to give your daughter money when she probably most needed it as a young adult. Finally and very importantly it is very unlikely you will die before say the age of 65 and quite likely you will live to 85 or older. So you need to make provision for your retirement as well as any inheritance . 
Otherwise the advice of Gary1984 seems sound.