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Featured - ISA allowance
What is the 2024/25 ISA allowance?A new tax-year means a refreshed ISA allowance to allocate. Find out more about the 2024/25 ISA allowance...
Savings
ISAs
Mortgages
Buy to let
Specialist mortgages
Featured - Debt and your credit score
How debt impacts your credit scoreA healthy credit score has its benefits, so make sure you manage your debt correctly.
Loans
Featured - travel insurance
Travel insurance 2024Discover the best travel insurance policy for your next trip.
Home & vehicle
Health & travel
Featured - High interest current accounts
Find current accounts offering in-credit interest rates up to 5.00% AER.
Current accounts
Featured - Purchase Cards
Best purchase credit cardsExplore the best cards with a 0% introductory period.
Credit cards
Credit repair
Calculators & guides
Featured - The triple lock explained
Could the value of your state pension rise by more than inflation?
Retirement
Business savings
Business products
Business insurance
How much can I give as a cash gift?
How much can I give as a cash gift?Will your loved one's gift be tax affected?
Categories
Featured guides
Popular news
Latest news - by category
Other money & finance news
Featured Star Ratings categories
Other Star Ratings categories
Grandparents struggling to decide what to buy for their grandchildren this Christmas may be considering gifting them money instead.
Although money does not bring the joy of seeing a grandchild unwrap a physical present on Christmas Day, it can be a great way to save towards the child’s future or simply provide them with the independence of having their own money.
For those considering giving a cash gift to their grandchildren this Christmas, here we’ve looked at the options available when gifting money of different amounts.
Grandparents gifting a small amount of money of £500 or less may find the easiest option is to give the gift as cash to the child. Parents or grandparents may, however, want to consider opening a children’s savings account for the child.
Many children’s savings accounts will allow the child to withdraw the money whenever they want, but it will also allow them to earn interest on money that is kept in the account.
All the children’s savings accounts currently available can be found in our children’s savings account chart.
Those looking to gift a grandchild a gift of up to £9,000 have a number of options. As with small cash gifts, they could consider choosing a children’s savings account, however these accounts may be subject to savings tax. As such, a cash Junior ISA may be a better option for those concerned about paying tax on savings.
Up to £9,000 can be deposited tax-free into a JISA for the 2021/22 tax year. Unlike a children’s savings account money cannot be withdrawn from a JISA until the account matures when the child turns 18.
Another tax-free option available is to deposit the money into premium bonds. Anyone can buy premium bonds for a child under 16, but the child’s parents or guardians will need to be told as they will be contacted to provide evidence of identity and address.
Premium bonds can be opened from just £25, and up to £50,000 can be deposited in total. All the money held within premium bonds is tax-free. Although no interest is offered, each month all premium bond numbers are entered into a prize draw which can see them winning cash prizes ranging from £1 million to £25.
Grandparents looking to gift £10,000 or more to a grandchild may want to consider choosing to invest the money or splitting the gift between a savings account or cash JISA and investing.
As already mentioned, up to £9,000 can be deposited into a cash JISA tax-free for the 2021/22 tax year. This JISA limit is the same for those considering opening a stocks and shares JISA, however if £9,000 is deposited into a cash JISA any money deposited into a stocks and shares JISA will be above the tax-free allowance and vice versa.
Those thinking about opening a stocks and shares JISA should be aware that investing in one has the risk of the child not earning any returns on the deposit and can, in some cases, result in all the money deposited being lost. For more information about investing in a stocks and shares JISA and other investment options available, read our guide on investing for children.
Amounts of up to £3,000 can be gifted each tax year without incurring inheritance tax (IHT). This means that a grandparent with three grandchildren can gift each one £1,000 and remain within the gifting tax limit, as long as the grandparent has not gifted money at any other time during the year.
An exemption to this is if the gifting limit was not reached in the previous tax year, in which case the unused amount can be passed on to this year. For example, if a grandparent did not gift any money last year and then gifting £3,000 to two grandchildren this year, they would still be within the limit.
In addition to this, as long as the giver has not reached their £3,000 annual exemption, they can gift up to £250 to as many people as they like.
Gifts that are above the £3,000 limit can be subject to IHT. To read more about the tax implications of gifting money read our guide on how much can be given as a cash gift and how tax is affected.
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The Financial Conduct Authority is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
The FCA is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
Are the new rules enough to attract high quality companies to the UK?
Are the new rules enough to attract high quality companies to the UK?
With the UK General Election taking place later this week (Thursday 4 July), we examine how some of the main parties’ policies could affect your personal finances if they were to form the next Government.
Find out what the Conservative and Labour Parties have planned for your taxes, savings and pensions.
The Financial Conduct Authority is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
The FCA is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
Are the new rules enough to attract high quality companies to the UK?
Are the new rules enough to attract high quality companies to the UK?
With the UK General Election taking place later this week (Thursday 4 July), we examine how some of the main parties’ policies could affect your personal finances if they were to form the next Government.
Find out what the Conservative and Labour Parties have planned for your taxes, savings and pensions.
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