Enable’s Independent Financial Advisors in Bishop’s Stortford sometime fine that some of their older clients can find themselves wanting to make significant financial gifts to their grandchildren or other young relatives. When the gifts are large, both familial feelings and estate planning considerations really need to come into play. The difficulty is that making large gifts can also lead to tax and other complications.
Should you be considering a gift of at least £50,000 it might be worth considering a Bare Trust. Ideally such a large gift should go into something like a Bare Trust because of the inheritance tax advantages. The income tax position in such a fund is simple and tax-efficient, especially if the donor is not the parent. But like Junior Isa’s, a Bare Trust can open up the potential danger of 18-year-olds getting their hands on too much cash too soon.
There are plans that uses a combination of the design of the investment vehicle and the structure of the trust to stop children getting their hands on too much money too quickly and allows the family to enjoy the benefits of a bare trust without necessarily providing the early access for the child. In them the gift counts as a PET and the funds are in offshore bonds, so until encashment they have the same tax profile as an Isa (soon to be New Isa). The profits could well be subject to income tax (unlike a Jisa or Isa), but planning might well help minimise that. If you are looking to make any large gifts Enables IFAs can help you manage the process.
Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE