Pay into my sons LISA

spudnuts

We have been saving money for our son and have around 12000. 
Would we be able to gift the money in £4000 chunks per year into a Lisa if he opened one? He's 21 and currently at university. We are looking for a way to transfer the money to help with a house purchase in the future. 

lucyandthomas

Make sure the money is paid into the LISA from an account in his name - if you pay it into his LISA directly from your account, I think it causes problems. Martin had a question about this on his TV show a while back x

spudnuts

Not sure but I think I may be only able to pay in a maximum of £3000 to avoid inheritance tax. Is that correct? 

masonic

spudnuts said:

Not sure but I think I may be only able to pay in a maximum of £3000 to avoid inheritance tax. Is that correct? 

You mentioned 'we' above, will the gift be from you and your partner jointly?. If so you could each make a gift of £2000 as part of your annual exemption. IHT only becomes an issue if you die within 7 years and your estate is large enough to pay IHT.

spudnuts

The funds would be paid from an Isa thats in my wifes name. So if £2000 was transferred from the Isa to my sons Lisa and £2000 transferred to an account that's in my name I could then transfer that £2000 to my sons LISA Making a total of £4000 would be OK? 

400ixl

You would both transfer to your son's current account. He would then add it to his LISA from his account.

Then repeat in the new tax year in April and then again the following April to get the full £12k in as soon as possible.

masonic

spudnuts said:

The funds would be paid from an Isa thats in my wifes name. So if £2000 was transferred from the Isa to my sons Lisa and £2000 transferred to an account that's in my name I could then transfer that £2000 to my sons LISA Making a total of £4000 would be OK? 

She probably won't be able to make a transfer directly from her ISA to your son's LISA. If you have a joint account, the easiest option would be to transfer £4k from there to your son's current account, then let him contribute to the LISA. If you only have separate bank accounts, then £2k from each account to your son's current account would make the gifting clear.

spudnuts

masonic said:

spudnuts said:

The funds would be paid from an Isa thats in my wifes name. So if £2000 was transferred from the Isa to my sons Lisa and £2000 transferred to an account that's in my name I could then transfer that £2000 to my sons LISA Making a total of £4000 would be OK? 

She probably won't be able to make a transfer directly from her ISA to your son's LISA. If you have a joint account, the easiest option would be to transfer £4k from there to your son's current account, then let him contribute to the LISA. If you only have separate bank accounts, then £2k from each account to your son's current account would make the gifting clear.

I think I have it. Transfer 4k from wife's Isa into joint bank account then transfer that to sons bank account and hopefully he'll deposit into the LISA. Jeez who knew it was that difficult to help your own son. 

Albermarle

spudnuts said:

Not sure but I think I may be only able to pay in a maximum of £3000 to avoid inheritance tax. Is that correct? 

Firstly you can gift as much as you like to who you like.

The only issue is that if you die within 7 years of the gift, the gift will be included in your estate for IHT calculation purposes. So it only matters if your estate is likely to be liable for IHT.  However you can not end up paying more IHT by giving money away.

Assuming that your estate will be big enough to attract IHT, you can follow the simple examples taking a simple amount below .

Have £100K that will be above the IHT limit when you die . Your estate will pay 40% tax on this . Cost £40K

Give that £100K away as a gift , but then die within 7 years . The gift will be included in the estate for IHT calculation purposes. Cost £40K 

Give away that £100K as a gift but survive longer than 7 years . It is not taken into account for IHT calculations . Cost zero 

spudnuts

So just transfer the 4k from the wifes Isa straight to my sons account and try not to kill the wife for at least 7years. Got it 👍

Dazed_and_C0nfused

And keep 🤞 he pays into the LISA and not crypto!