The story so far...

Claire, an adviser, is working with an elderly client, Arthur. She is broaching the tax advantages of gifting money to his grown children.


Arthur: My eldest grandchild Neil, is very settled, he’s an accountant. He has a lovely wife and twin girls.

Claire: How are Rebecca and Katie?

Arthur: The girls are gorgeous. You know, they’ve lighted up my life. Katie lost another tooth – soon she’ll have fewer than me!

Claire: Arthur, you know we’ve talked in the past about helping them. It’s an expensive time of life, with young children. And if you gift them some money now, it’ll be tax free as long you don’t die within seven years.

Arthur: I’d be happy enough to help, but you know Neil’s brother, David. He’s more of the creative type. He paints, he’s been in the theatre. It’s all very exciting.

Claire: And you want to give something to David as well as to Neil?

Arthur: I don’t think I could favour one over the other, no.

Claire: Of course not. But you know you’re not getting any younger. We really should be thinking about what we can do to help your wonderful family.

Arthur: Neil would be perfectly sensible, invest the money, or put it toward a good education for the girls.

Claire: And David?

Arthur: He’s a different type of person…

Claire: He would spend the money? I mean….

Arthur: I know what you mean. He leads a different kind of life to Neil. David’s full of excitement, he’s an artist, he has the most fascinating friends.

Claire: You do mean that he would spend the money?

Arthur: You don’t understand! You mustn’t think the worst of him. It’s a different style of life!

Claire: We could set something up with the girls as the specified beneficiaries…

Arthur: I don’t think that would be the right thing to do. Neil is a good man, he knows what’s best for his own family.

Claire: Then we could gift some money to Neil directly.

Arthur: But I couldn’t do that without giving the same to David.

Claire: And you think David… would spend it…? But if you don’t gift it to them now … it’ll go to them after you die … but fully taxable.