Hello, I am Keith and ready to assist you with your problems. My view is that you will have to tread very warily here as savings of over 6000 pounds are included as income in the housing benefit calculation. You will appreciate that your intentions will seriously affect your daughter's entitlement to housing benefits. I see you have grasped the IHT implications which can ultimately affect Inheritance Tax when you mention 3000 pound annual allowance. HMRC guidance is clear: Annual exemption You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.
A colleague reminds me that:
Your daughter would not lose housing benefit if her savings are below £16k.
You could give a gift against this year first. If this years allowance is exhausted then you could utilise unused allowance from previous year.
Thank you Keith, but could you also please comment on my query about paying her a monthly allowance too? For example, could you please confirm that if I were able to make her a monthly allowance of, say £300 pcm, provided it came out of my normal income (and not savings), then that would not contravene the tax rules.