Students who started university in September can expect to pay about £33,500 for a three-year degree course, according to the research by NatWest. This includes the new tuition fees and is up from £28,600 last year.
One in three parents plan to pay for everything while their son or daughter is at university, according to the survey – and the good news is that there are now tax perks.
If parents give their son or daughter a lump sum to cover their ‘maintenance’ while at university, including tuition fees, the gift will be exempt from inheritance tax (IHT).
Under normal rules, a gift would be exempt only if the donor lived for another seven years, but there is no time limit if it is for a child’s maintenance while he or she is in full-time education.
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This exemption applies only to parents, but there are other perks if grandparents want to help out. Gifts used for education costs will be exempt from IHT if they are out of income and do not reduce their standard of living.
Even if you are covering most of the costs of university on behalf of your children, it might still be worth them taking out a student maintenance loan.
The interest, now 2.4 per cent, is so low that they could easily invest the money at a higher rate and make a tidy profit.
If you would like to find out more, please email or contact us for further information.
Quote source: Times Media 20.08.06 |
