Private school fees have shot up in recent
years with a typical school term now costing around £4,765. And for the
majority of parents, affording such fees requires careful planning and regular
saving.
In addition to traditional saving, more innovative strategies can be applied such as using the business or reducing the grandparents’ inheritance-tax bill.
For example each grandparent can give up to £3,000 a year free from inheritance tax, whether they pay into savings accounts, trusts, old child trust funds or Junior ISAs.
You could also set up a discretionary trust so that grandparents can contribute towards the fees. This is easy to do and the income is treated as the child's own for tax purposes. Parents on the other hand cannot do this, as the income generated would be taxed as if it belonged to the parents.
Of course, all these depend on your own personal circumstances and if you’d like to have a chat about school fee planning, then please get in touch with us.
