Gift the money or pay for what they need

capsule99

Hello, I am wanting to help my child with her home renovation financially. Am I better to gift her a few thousand pounds directly, or would it be better for me to “buy” something - I.e pay for her new windows directly to the glazing to company, or pay for her re-wire? So it doesn’t go through her first? 

It would only go to her briefly and then straight out to the glazing company / electrician - but I’m concerned that it may be subject to the £3000 limit rule? 

What’s my best course of action with this? 

Thank for any advice. 

Misslayed

Which rule is it that you're concerned about?

Brie

There's rules about what might be disregarded for inheritance tax should you die relatively soon after having made a gift.  But that's only a concern if you have a lot of assets.  Think the basic limit is something like £350k which may include the value of your house.  

Another thing to take into account is your age and health and whether you may need care in the next decade or so.  If that's possible and your have few assets relatively your local council might wonder about deprivation of assets if they end up footing the care bill.  

And what's your daughter's circumstances?  If you give her money will that effect benefits she receives?  And what does she want?  You might think windows are the best thing to get but she might think a new boiler.  If you want to help don't forget that if she's bought a home she's an adult and is entitled to her opinions and to run her own life.  (my mom decided to buy me a car once and picked one out that was nothing like what I wanted or needed but it was that or nothing.)

Keep_pedalling

There is no £3000 limit to making gifts, that amount is simply an IHT exemption, and that exemption is doubled if you did not make a gift in the previous financial year.

Just gift her the cash, and if the gift is over £3k then keep a record of it where your executors can easily find it if you meet an untimely end.