What are the tax implications for paying your children's student loan post study?

loobyloobster

I have been travelling overseas for the past year. Due to securing a new job in Australia, the SLC have written to advise me that I now need to begin repaying my loan again.

As the loan is no longer repaid via my pay check (as in the UK system), I am required to bank transfer the funds to SLC. Due to international transfer fees to UK accounts, my parents asked me if there was any benefit (or negative repercussion) for them to support the repayments from their bank account on my behalf.

If my parents were to set up a direct debit from their UK bank account to make the repayments, are there any tax implications for me or my parents? Namely, does this count as a gift under inheritance tax or a normal expense?

My parents have always supported my educational expenses throughout university (rent support, the odd food shop). The hundred odd pounds per month to support my education is considered a normal expense for them now. As they have the income to do so, they are keen to support the repayments however don't want to me to be stung later down the line.

Can anyone advise?

retiredbanker1

Will you be reimbursing them at all?

If so no tax problems whatsoever.

If not and the taxman deem it to be a gift (should they die) then the first £3000 per tax year should be tax free.

Have you looked into a digital card at all such as Wise? It might be that you could set up a transfer on this to repay your student loan?

Keep_pedalling

There are no negative tax consequences of paying off a student loan or any other gifts to your children. Any part of the gift not covered by exemptions stayed within your estate for 7 years but even if you die within that time no one is going to be any worse off. 

silvercar

Regular payments out of income are fine, without impacting living costs are fine.