Welcome to the Financial Column in association with Moneyplus, Bridge Street, Boyle.
Q. My wife and I have 2 grandchildren. We are reasonable secure financially and would like to make provisions for our grandchildren’s education. What would you recommend as the best way for us to do this ?
A. In the current economic climate, many grandparents are helping or contributing to the cost of their grandchildren’s education or college fees. When doing so, it is important to remember that this could create a Capital Acquisitions Tax (also known as inheritance tax or gift tax) bill for your grandchildren unless you plan this properly.
However, under the CAT rules, there is an annual small gift exemption where you can each give your grandchildren up to €3,000 a year tax free without affecting your grandchild’s CAT tax-free threshold of €30,150 – this is the total lump sum which a grandchild can receive from grandparents before they are subject to CAT at 33%.
In the current low deposit interest rate environment, and particularly if your grandchildren have a considerable length of time before they reach the age of 18, it would be a good idea to set up a savings or investment plan under what is known as a bare trust. This allows the trustees (which are often the grandparents/parents) to invest money on a child’s behalf in a tax-efficient way.
You should consult an independent financial adviser like Money Plus to ensure you get the most suitable financial planning and investment advice if you are considering setting up an investment plan for your grandchildren/children. In this regard Belinda McCauley of Money Plus would be delighted to assist you. Belinda’s contact details are : 086-7847827/071-9194000 or email: [email protected]
MoneyPlus are experienced investment and financial brokers and have been in the business of financial and investment planning for many years. They are dedicated in providing bespoke financial planning advice to clients. If you would like further advice on the above or any other financial information please contact Belinda McCauley in our Boyle office on Bridge Street on 071 9194000 or [email protected]
Boyletoday.com/MoneyPlus accept no responsibility for any decisions taken as a result of advice provided in this column. A reliable recommendation can only be made following a full detailed consultation taking an individual particular circumstances into consideration