Inheritance tax - gifting money for extension works for disabled granddaughter

Keep_pedalling

Ms_Chocaholic said:

Can your parents not pay the builder direct?

That is still gifting.

daveshep26

Keep_pedalling said:

First off if they gift over their annual exemptions, it NEVER increases the amount of IHT that would have to be paid, secondly you don’t pay the IHT their estates do, so it is not a reason not to make the gift. 

Gifts from excess income only reduce the amount of growth in your IHT burden so if their joint net worth is already over £1M they should be looking at larger one off gift as well as gifts from excess income. 

Paying for school fees is not exempt in its own right.

OP- you have had great advice here and I wish your family all success in supporting your daughter.

For other readers, while @K_p is contextually correct on effect here as referring to grandparents, a disposition which is for "school fees" is not deemed as a transfer value from a parent or guardian (IHTM04175 here - (IHTM04176 de facto covers grandparent case)) - it effectively classifies as a maintenance expense for ( dependant ) under 23's in full time education.
(NB - i am not a tax expert, but looked into this for my own planning purposes re paying contribution for kids' University accommodation.)     

HTH

Ms_Chocaholic

Keep_pedalling said:

Ms_Chocaholic said:

Can your parents not pay the builder direct?

That is still gifting.

Yes it is but when it shows on their bank statements as payment to X Builders then it's not as obvious that it's gifted as it could be for building work on their own property.

Andy_L

Ms_Chocaholic said:

Keep_pedalling said:

Ms_Chocaholic said:

Can your parents not pay the builder direct?

That is still gifting.

Yes it is but when it shows on their bank statements as payment to X Builders then it's not as obvious that it's gifted as it could be for building work on their own property.

Which would be tax evasion 

silvercar

Are grandparents really not allowed to facilitate making their grandchildren’s lives easier, without it being considered a gift? Ie grandparents spending their own money on things they want to spend on? If not, I suppose the other option would be to set up a trust or charity for the benefit of the named person, with all the the legal requirements and then they could give to the trust.

silvercar

Andy_L said:

Ms_Chocaholic said:

Keep_pedalling said:

Ms_Chocaholic said:

Can your parents not pay the builder direct?

That is still gifting.

Yes it is but when it shows on their bank statements as payment to X Builders then it's not as obvious that it's gifted as it could be for building work on their own property.

Which would be tax evasion 

Which would match the cash that is builders expected method of payment!

Albermarle

silvercar said:

Are grandparents really not allowed to facilitate making their grandchildren’s lives easier, without it being considered a gift? Ie grandparents spending their own money on things they want to spend on? If not, I suppose the other option would be to set up a trust or charity for the benefit of the named person, with all the the legal requirements and then they could give to the trust.

Although with the potential costs and hassle of a trust, you may well be better off just making a normal gift.
If you live 7 years it is out of your estate anyway ( pre budget anyway) .

KennyH1

Thanks everyone for your advice / comments.