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Gifting for children


By: Sarah Edmunds, Paraplanner Date: 4 December 2019
Category: Lovewell Blake Financial Planning

It’s that time of year again when our thoughts come to gifting to our nearest and dearest. When it comes to the children in our lives this often means a new toy, or a new outfit. But what about those who already have everything they need?

Gifts of money are often considered for our children and grandchildren and there are a number of investment options you could consider, each with their own set of benefits and drawbacks:

Junior ISA (JISA)
  • Invest up to £4,368 for the 2019/20 tax year
  • Available from birth
  • Tax free growth
  • Access from age 18

Premium Bonds
  • Chance to win cash prizes (paid to parent)
  • Invest from as little as £25 to a maximum of £50,000
  • Child can access from age 16

Pension
  • Invest up to £3,600 gross per annum (£2,880 net) each tax year
  • Amount falls within annual gift allowance
  • Tax Free Growth
  • Access at retirement (currently 55)
  • Encourages saving habit for the future

Cash
  • Access at any time
  • No limits on gift amount (larger gifts may be subject to Inheritance Tax)

Trust
  • Access is ‘gated’ by trustees
  • No limits on gift amount (large amounts may be subject to Inheritance Tax)
  • Can be accessed at any time for the benefit of the child(ren) (for example for education fees)

Whilst cash might be top of the wish list for many children, these alternatives might just help have a longer term benefit and/or encourage good money habits.

If you would like to talk to someone about the various options, please do contact us as your trusted adviser for more information.
 
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