Why grandparents can be 'trusted' with school fees

What advisers need to know about discretionary trusts and IHT

clock • 4 min read

Richard Burgess looks at school fees, discretionary trusts and the consequences for IHT...

With the back-to-school season bringing with it an unwelcome hike in school fees, generous grandparents may wish to contribute to costs and alleviate the financial burden on their own children. They may not of course be inspired by altruism alone; grandparents could also reduce the inheritance tax bill of their own estate. Paying the fees as they fall due is one way of achieving this but creating a discretionary trust to put funds aside for future fees may put a greater dent in the inheritance tax bill. A discretionary trust is a flexible trust under which no one has an automatic righ...

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