IHT

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Would school fees paid of £8k pa be subject to IHT on the death of a Grandparent?

They are paid directly to the school so would they be a PET until the time period expires?

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:IHT

    No, expenditure on family maintenance is not within the scope of IHT this includes school fees paid for a child. It is a specific exemption.

    Kind regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:IHT

    Thanks, thats what I was hoping.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:IHT

    Steve are you sure that is correct? Though I am no expert in this field, checking the Hardmans' tax rates and tables they show the exemptions and that is not listed as one of them.

    Would this not be a gift?

    Other things to think about though is:-

    *Does the grandparent's estate reach the threshold? (£285,000)

    *Could the £8,000 be classed as given out of already taxed income?

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:IHT

    Hi Dean,

    IHT has certain exemptions, such as gifts to spouses, charities etc. I know which exemptions you are referring to with the Hardman's manual though as is always the case in these matters, the list is not conclusive nor exhaustive due to the circumstances in which something could appear to be a gift (like the above), but covered by an exemption.

    In the case of the above scenario, whilst you are correct in citing the considerations (annual exemptions etc) these would not be relevant in this case.

    Education fees such as the above are not specifically written in stone as an exemption. School fees paid on behalf of a child fall under the umbrella of "family maintenance" which is exempted (specifically) though not on paper (for practical, as well as circumstantial reasons I suspect). Family maintenance payments are not necessarily classed as "gifts" in the sense IHT refers to.


    Kind regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:IHT

    That's what I thought you'd say.

    Merry Christmas Steve.

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:IHT

    And to you too Dean.

    Regards
    Steve

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