12 Tax Tips to Easter – #11 Build up a tax free fund for children

top-tax-tip11The run-up to the tax year end on 5 April 2016 is the perfect time to consider tax planning opportunities and to put in place strategies to minimise tax throughout 2016/17.

Good planning and careful timing are critical if you want to maximise tax reliefs or minimise the tax bill on a transaction or investment, and to avoid falling foul of the system of penalties and interest levied by HM Revenue & Customs (HMRC).

On this Budget day, our 11th tax tip of the series explains how building up a tax free fund for your children or grandchildren can help you mitigate your tax bill.

#11 Build up a tax free fund for children

  • Junior Individual Savings Accounts (JISAs) enable parents or grandparents to save up to £4,080 a year, tax-free for each of their children or grandchildren. For children with a Child Trust Fund the same £4,080 limit applies. You can transfer most Child Trust Funds into a JISA.
  • A stakeholder pension allows contributions to be made by, or for, all UK residents, including children. You can make a net contribution of up to £2,880 (effectively, £3,600 gross) each year for members of your family, even for those who do not have any earnings.
  • Your children or grandchildren may be looking to get on the housing ladder, you could help fund their ‘Help to Buy ISA’.

Tax is a complex matter, so we recommend that professional advice is sought when considering any of the above. Our highly qualified and experienced tax team would be happy to discuss your tax affairs with you.

If you have any questions regarding your tax affairs, please do not hesitate to contact our tax team on 01491 579740.