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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5836
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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It is my understanding that the IHT rules allow a parent to

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It is my understanding that the IHT rules allow a parent to contribute to the full time education cost of a child and that such payment is IHT exempt, no matter what age the child.
Specifically, my son is now aged 35 years. He obtained a numerate degree and worked 7 years for firm then 7 years for himself in a similar field but now the work is drying up. He has decided to return to full time education for a 1 year MSc course in what, on the face of it, seems an eminently marketable discipline. The fees are about £9000 for the duration.
I would like to pay his fees, on my interpretion that they would be IHT free - I don't want the estate lumbered if I don't make it 7 years!
My question is therefore, have I understood the rules correctly?

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Thank you for your question.

A gift for the maintenance, education or training of a child of either the donor or the donor’s spouse is exempt provided that it is for the child’s maintenance, education or training up to the age of eighteen or until the completion of full-time education if later. Similarly, a gift made for the maintenance, education or training of a child who is not in the care of either parent is exempt until the child attains age eighteen.

Your son is 35 and has been working for years before wishing to return to full time education. The fees would not be exempt for IHT purposes as such.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Hi there

Just checking to see if you need more clarification/information or have I answered your question.

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Many thanks

Customer: replied 2 months ago.
Ok, so is there any alternative route to follow here, maybe some form of trust (tho I realise this is a complex issue and would only expect you to point me in some direction).

Thank you for your reply.

Trust may not be the ideal route. More information on Trusts and taxes can be found here . look at When Inheritance Tax is due

Contribution towards expenditure out of your income would be exempt for IHT puposes.

I hope this is helpful and answers your question.

Customer: replied 2 months ago.
I hadn't considered the possibility raised in your last comment - that might work well. I have a taxable income of 100K with no mortgage, biggest outgoing is council tax. Do you think they would deem £500 per month, say, as a reasonable contribution? It wouldn't make a dent on my lifestyle.

Thank you for your reply.

Based on your taxable disposable income, £500 per month contribution would be deemed out of income and exempt.

I hope this is helpful and 2 other Tax Specialists are ready to help you
Customer: replied 2 months ago.
Some useful pointers there - I may well proceed with that kind of approach. Thanks.

I thank you for accepting my answer.

Best wishes.