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  • FIRST POST
    • loulou41
    • By loulou41 5th Feb 18, 8:12 PM
    • 2,706Posts
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    loulou41
    Regular savings to pay for uni
    • #1
    • 5th Feb 18, 8:12 PM
    Regular savings to pay for uni 5th Feb 18 at 8:12 PM
    My husband and I have got surplus income. We want to set a regular saving account for our grandson to fund his uni fees. If we transfer 1000 a month it will be 12000 a yr. Does his mum has to declare any amount above his personal allowance & pay tax? Thanks
Page 1
    • purdyoaten2
    • By purdyoaten2 5th Feb 18, 8:33 PM
    • 867 Posts
    • 421 Thanks
    purdyoaten2
    • #2
    • 5th Feb 18, 8:33 PM
    • #2
    • 5th Feb 18, 8:33 PM
    Unfortunately this is, by a country mile, the most frequently asked question on this forum and the answer is always the same.

    Your son will not be liable for tax as there is no tax on gifts in the U.K.
    purdyoaten lost his password
    • 00ec25
    • By 00ec25 5th Feb 18, 8:43 PM
    • 6,494 Posts
    • 6,030 Thanks
    00ec25
    • #3
    • 5th Feb 18, 8:43 PM
    • #3
    • 5th Feb 18, 8:43 PM
    My husband and I have got surplus income. We want to set a regular saving account for our grandson to fund his uni fees. If we transfer 1000 a month it will be 12000 a yr. Does his mum has to declare any amount above his personal allowance & pay tax? Thanks
    Originally posted by loulou41
    1. the money you give will not be taxed and is not income so has no bearing at all on his personal allowance (or mother's for that matter)

    2. as you are the grandparents, any interest earned on the money held in an account in the grandchild's name will not be subject to income tax unless your grandchild exceeds his own personal allowance through income earned by him (not through lump sum gifts from you, even if they are given every month. They are not "income" in that sense)
    https://www.gov.uk/savings-for-children
    Last edited by 00ec25; 05-02-2018 at 8:47 PM.
    • agrinnall
    • By agrinnall 6th Feb 18, 10:06 AM
    • 20,311 Posts
    • 16,059 Thanks
    agrinnall
    • #4
    • 6th Feb 18, 10:06 AM
    • #4
    • 6th Feb 18, 10:06 AM
    Are you expecting your grandson to be in a high earning job when he graduates? If not then paying university fees is unlikely to be the best use of the money, a nest egg for a property purchase deposit is potentially much more useful. Although of course if you are giving the money to him then he can do what he likes with the money anyway as you will have no control over it.
    • xylophone
    • By xylophone 6th Feb 18, 3:19 PM
    • 25,544 Posts
    • 15,089 Thanks
    xylophone
    • #5
    • 6th Feb 18, 3:19 PM
    • #5
    • 6th Feb 18, 3:19 PM
    You as grandparents will be making regular gifts out of income to your grandchild.

    IHT position here

    https://www.howardkennedy.com/media/504667/gifts-out-of-income.pdf

    The gift is not coming from the child's parent so that the 100 rule does not apply to interest accruing on the child's account.

    https://www.gov.uk/savings-for-children

    Since the money saved could be a substantial amount by the time the child is 18, it could be as well to make full use of the JISA.

    https://www.gov.uk/junior-individual-savings-accounts
    • Larac
    • By Larac 9th Feb 18, 12:02 AM
    • 823 Posts
    • 512 Thanks
    Larac
    • #6
    • 9th Feb 18, 12:02 AM
    • #6
    • 9th Feb 18, 12:02 AM
    Have to admit if this was me I would not invest money for Uni fees but would to invest it for a deposit in a house. My son went through Uni and got a law degree and the amounts they pay back are really quite small in the grand scheme of things. I am yet to be convinced that most Uni students will pay their loan back. My daughter is doing a policing degree next year and going on their pay rates it will be many years before she pays anything back. Their generation will find it difficult to get the deposit together so hence I would focus on this,
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