01/09/2026
Helping your grandchildren is a lovely thing to do. Doing it without leaving yourself short takes a little more thought.
It’s the part that trips a lot of people up.
We assume the sensible part is all about tax. Of course, that matters, but it isn’t the only variable that needs to be taken into account.
On the tax side, the rules are fairly generous. You can give away £3,000 each year without HMRC raising an eyebrow, and regular gifts out of surplus income are fine too, as long as you keep proper records. Junior ISAs, Junior pensions and trusts are good options too, particularly trusts if you want some say over how the money is eventually spent rather than watching it being frittered away. Or used to fund holidays or gap year spending…
The part that gets forgotten is the deposit.
For example, if you hand your daughter £40,000 towards a first home, then she and her partner separate a year or two later, she would be left with half of it. A properly structured loan or a deed of trust prevents that. Nobody enjoys planning for the worst, but it's the clever thing to do.
Starting early means the small amounts do most of the heavy lifting.
Leaving it late means you could be left with fewer options and a larger Inheritance Tax bill.
Our advice is always to look after yourself first. Generosity is wonderful, but not if it leaves you short later on.
It's good to get the structure right before you start moving money around. If helping the family is on your mind, get in touch.
[email protected]
You can also read more in our latest article.
https://www.jvca.co.uk/how-grandparents-can-help-children-and-grandchildren/
