Your children’s financial future

November 21, 2014 Categories: Tax

A prominent financial challenge facing children today is the amount of debt they will have amassed by the time they leave university. With the advent of higher tuition fees, students debt is likely to increase significantly in the coming years, and the latest studies suggest average repayments will be over £66,000 for a student starting university in 2014.

For younger family members, the Child Trust Fund (CTF) created the opportunity for parents, grandparents and other family members to build a fund to help offset university expenses and minimise debt at the beginning of 2011, to be replaced by the new Junior Individual Savings Account (JISA).

All children have their own personal allowances, meaning that income up to £10,000 escapes tax this year, as long as it does not originate from parental gifts. If income from parental gifts exceeds £100 (gross), the parent is taxed on it unless the child has reached 18, or married. Consequently parental gifts should perhaps be invested to produce tax-free income, or accumulate income, or in a cash or stocks and shares JISA. The £100 limit applies per parent but not to gifts into CTF’s, JISAs or National Savings Children’s Bonds.

If you would like a copy of our tax and financial strategies 2014/15 brochure which contains lots of advice and action points please contact us for either a pdf copy by e mail or hard copy in the post.