Are you funding your dependants tax efficiently?
Supporting your children can be costly, especially given the increase in tuition fees for universities, the cost of cars and driving lessons, and increasing property prices. If you are funding your children’s cash requirements using taxed income (e.g. employment or dividend income), there could be substantially more tax efficient options available to you.
Are there costs your employer could pay directly instead of you, for example? There could be both cash and NIC savings for you, if so, with no additional cost to your employer.
Do you own your own company? Could you pass shares to your children so dividends are paid to them and taxable on them? This could provide inheritance tax as well as income tax savings.
Do you have investment properties or share portfolios? Could you transfer part of these to your children? The income payable on their proportion would then be assessed to tax on them, utilising their personal allowances and lower rates of tax (a potential tax saving and therefore increased net income of up to 45%).
Are you a grandparent wishing to support your grandchildren, but are worried about wealth leaving the family or whether the grandchildren are responsible enough? Have you therefore considered a trust?
The most suitable option for you will depend on your relationship with the child (i.e. parent or grandparent), the age of the child (over or under 18), your assets and protection requirements and your personal income and capital needs.
If you would like to explore the options available to you further, please contact Gemma Hedges on 023 8046 1259.