IHT - paying for grandchild's daycare from income

sclare

I'm trying to help out my daughter by helping with the cost of my toddler granddaughter's day nursery costs, via the tax free account. The cost is very comfortably within my excess income, so will that free it from inheritance tax? And if do I need to keep any records as proof?

If to be fair to my other daughter, I pay a similar bill via DD - also well within my income, is that okay too?

HappyHarry

Yes that would be fine. I would suggest that you keep records as it will make life far easier for your executors.

Runner_Duck

Take a look at the form IHT 403, section 20 -22. that lists exactly what information you need to provide for Gifts out of Income. It will be much easier for your Executors if you have all this tracked in a little spreadsheet.

poseidon1

Runner_Duck said:

Take a look at the form IHT 403, section 20 -22. that lists exactly what information you need to provide for Gifts out of Income. It will be much easier for your Executors if you have all this tracked in a little spreadsheet.

Strongly, agree with Runner_Duck, what you consider to be 'excess income' may not be on all fours with HMRC' s definition. Best to use form IHT 403 as your template for record keeping purposes, to avoid your future executors the colossal headache of proving what you currently believe to be the case.