How a conversation with our trust expert has enabled two grandparents to help towards the education of their grandchildren, saving £15,000 per annum.
We were approached by a couple of grandparents who were looking to help their children fund school fees payments for the grandchildren. The couple who approached us owned two separate businesses. After talking with them, we established that their son and his wife both worked within the businesses and were paid salaries through PAYE.
The Client's Objectives
The son and his wife have three children, two of whom are in private education. They were looking at ways of helping become more tax-efficient and the grandparents were keen on assisting with the funding of the school fees in whatever way they could.
We were sending Aidan & Calum to school at a cost of £38,000 per annum. This service has enabled us to reduce our school fees burden by £18,000 every year.
Mr & Mrs S, London
From talking with them, and after discussing asset protection and inheritance tax planning, it was agreed that the following be done:
The Value to the Client
- We established a Group in order to provide a platform for asset protection for the shareholders and an environment whereby results of the trading entities would remain separate but held in one legal structure
- We gave the company the option to now partially remunerate the son and daughter in law by way of dividend, as they are now part owners in the company
- We started the grandparents on the road to an effective succession and transition of management/ownership to the next generation
- We helped to establish a Trust for the grandchildren, which, in future, may provide a dividend income for the grandchildren directly
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Some of the possible solutions are high in investment risk and will not be suitable for everyone. We would provide detailed recommendations to help you in this regard. Paying fees through a Limited Company have some complicated rules and may not be appropriate for all firms. Levels, bases of any reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The value of an investment can go down as well as up. Past performance is not a guide to future performance.