Parental contributions - how are they viewed by HMRC?

naomipe Forumite Posts: 6
Third Anniversary Name Dropper First Post
This year, my daughter is not going to get the full maintenance loan because of our household income - she is going to be eligible for the minimum loan. We are lucky enough to be able to make up the difference but is this to be viewed as a gift? An interest-free loan? I don't really understand how the government expects parents to make up any deficit on the one hand and then restrict the amount you can gift out of income per year on the other. Any advice/insights gratefully received. At the moment am thinking we have to gift part, loan the rest and then turn the loan into a gift in the following tax year - assuming we can still afford to.


  • marcia_
    marcia_ Forumite Posts: 1,174
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
     I'm not aware of any restrictions on gifts.
    You can gift all your income away if you wished. 

     You are supporting your child not gifting or loaning them money 
  • Rodders53
    Rodders53 Forumite Posts: 1,945
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 27 April at 3:55PM
    There are no limits on making gifts in the UK.

    InHeritance Tax (IHT) on gifts is only applicable if you die within 7 years of making a gift to anyone... and the comes out of your taxable estate funds.  That's the only time you could fall foul of gifting... and there are 'limits' on some gifts that make them exempt from IHT (which may be what you are thinking of).

    The sort of regular maintenance gifts to your daughter if from INCOME (and not from your savings) will be exempt from IHT anyway. explains.

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