Photo by Grandparents, Give Your Grandkids a Head Start with This Tax-Free Gift
Are you a grandparent looking to give your grandkids a financial head start? Martin Lewis, the renowned Money Saving Expert, has a crucial tip to share with you. You can gift your grandkids up to £3,000 tax-free, and it’s a great way to help them get ahead financially.
The Rules of Tax-Free Gifting
According to Martin Lewis, you can give your grandkids £3,000 tax-free each year. But what if you want to give them more? The good news is that you can carry over last year’s allowance, so in the first year, you can give them up to £6,000 tax-free. After that, it’s £3,000 per year.
Grandparents can give their grandkids a head start with tax-free gifts
The Power of Surplus Income
But that’s not all. If you have surplus income, you can give your grandkids even more. According to Rebecca Benneyworth, a chartered tax advisor, if you make regular gifts from your surplus income, they are immediately free from inheritance tax. The key is to identify your surplus income and make regular gifts.
Surplus income can be used to make tax-free gifts
The Importance of Regular Gifting
It’s essential to make regular gifts to prove that you intend to make it a regular pattern. If you only make one or two gifts and then pass away, the executors of your will may struggle to prove that no tax is due on the payments you’ve already made. However, if you’ve made regular gifts over several years, you’ll have a strong case.
Regular gifting can help prove your intention
Conclusion
Giving your grandkids a financial head start is a great way to help them achieve their goals. By taking advantage of tax-free gifting and using your surplus income, you can make a significant difference in their lives. So, start planning today and give your grandkids the gift of a brighter financial future.
Give your grandkids a head start with tax-free gifts
