← All insights

Most people want to help their children and grandchildren. Rather fewer want to hand over a large sum, unconditionally, to a twenty-year-old.

In short
  • Outright gifts are simple but irreversible.
  • Trusts allow control over timing and access, at the cost of complexity.
  • Pensions and Junior ISAs can help younger generations tax-efficiently.
  • The conversation between generations matters as much as the structure.

How do you give wealth away without losing control of it?

Effective estate planning usually means giving money away during your lifetime. But once a gift is genuinely made, it is gone — you cannot attach conditions after the fact, and any strings attached may mean it never left your estate for tax purposes at all.

Gifts, trusts, pensions or Junior ISAs — which suits your family?

  • Outright gifts. Simple, effective after seven years, and permanent. Best where you trust the recipient and the amount is affordable.
  • Trusts. Allow you to decide who benefits, when, and on what terms. More complex, with their own tax treatment, but powerful where timing matters.
  • Contributing to their pension. You can pay into a child's or grandchild's pension, with tax relief added. Locked away until their late fifties — which is precisely the appeal for some families.
  • Junior ISAs. Straightforward and tax-efficient, though the child gains full access at 18.

Why does your will need reviewing alongside any gifting?

Structures put in place during your lifetime can be undone by an out-of-date will. Reviewing both together — ideally alongside your solicitor — is the sensible approach.

Should you talk to your family about what you plan to leave?

In our experience the families who handle this best are those where the intentions have actually been discussed. Not the amounts necessarily, but the principle: what the money is for, and what it is not for.

That conversation prevents more difficulty than any structure.

Can you afford to give this away and still fund your retirement?

Every one of these options should follow the same test: can you afford to give this away and still fund your own retirement, including a period of care? Only once that is answered does the structure question matter.

Source: gifting exemptions and the seven-year rule are set out on GOV.UK, Inheritance Tax: rules on giving gifts.

This article is general information, not personal advice. Tax treatment depends on individual circumstances and may change in future. The Financial Conduct Authority does not regulate inheritance tax planning, trusts or will writing. The information contained within this article was accurate at the date of publication and is subject to change. Reviewed by Bright Wealth before publication.