Before You Help Your Kids With Money

Most UK families who help their adult children with money do it inefficiently — and most never realise.

The £20,000 deposit toward the grandchildren's house. The £40,000 toward the daughter's wedding. The school fees for the grandchildren. The annual transfers to help cover the increase in interest rates. Each one is a gift, each one starts a seven-year clock for Inheritance Tax, and most families never document any of it. When the second parent dies, the executor has to list gifts made in the previous seven years — and without records, the Inheritance Tax bill can be higher than it needed to be.

The rules are not complicated. The seven-year rule is a single page of explanation, properly written. The £3,000 annual exemption is straightforward. The wedding-gift and small-gifts exemptions stack neatly on top. And there is one specific exemption in UK law — gifts out of normal expenditure from income — that has no upper limit at all, if you meet the conditions and document it correctly. Used properly, it can take large amounts outside your estate straight away, with no seven-year wait — but the conditions and records matter.

This guide is the playbook. The seven-year rule, the exemptions, the documentation, the Junior ISAs and Junior SIPPs, the trust options, the Deeds of Variation, and the divorce-and-remarriage risks. Everything ordinary UK families need to know about giving money to the next generation, the right way.

What's inside the guide

42 pages. 26 chapters. The longest individual guide in the library, because the territory is the biggest. The main topics:

Part One — The seven-year rule

The seven-year rule, properly explained — including what taper relief actually does and doesn't do
The annual exemptions stack: the £3,000 yearly exemption, the £250 small-gifts exemption, the wedding-gift exemption
Gifts out of normal expenditure from income — the exemption with no upper limit, and the documentation that makes it stick

Part Two — Common gifts and how to make them properly

House deposits and the parent-as-co-signer trap
School fees and university fees — the gift-from-income route
Annual transfers to adult children and grandchildren
Wedding gifts and civil partnership gifts — the specific exemption that matters

Part Three — Vehicles for younger generations

Junior ISAs — £9,000 a year, locked till 18, when it works and when it doesn't
Junior SIPPs — £2,880 a year, when it makes sense for grandparents to fund retirement decades early
Bare trusts vs discretionary trusts — the structural choice for grandparents who want to provide for grandchildren they may not live to see grow up

Part Four — Estate-level planning

Deeds of Variation — the two-year window after a death to restructure inheritance for the next generation, with the surviving spouse's consent
Care fee deprivation rules — the test councils apply when gifts were made shortly before care became necessary
Divorce and remarriage risk — how to protect gifts to adult children against their future relationships

Each chapter includes worked examples, a documentation template, and the specific HMRC reference for the rule.

Who this guide is for

This guide is for you if:

You have one or more adult children, and you've helped them with money — or you're planning to
You have grandchildren, and you want to provide for them in tax-efficient ways
You're worried about Inheritance Tax, and you've heard about the seven-year rule but never had it properly explained
You're a higher-net-worth household (£500K+ in non-pension assets) and the IHT planning matters

This guide isn't for you if:

You don't have children or grandchildren
Your estate is well below the IHT thresholds (under £325,000 single, £650,000 as a couple) and unlikely ever to be IHT-relevant
You already have a full estate-planning solicitor managing all of this — though some readers in this category still buy the guide to understand what their solicitor is doing

Who Gerald is

Gerald Whitlock is an AI-generated presenter, not a real person. There is no professional title behind these guides: we are not accountants, tax advisers or financial advisers, and nothing here is personal advice.

We made Gerald and these guides because the rules that decide how much tax a pensioner pays, which benefits they can claim and what happens to the family home are all public, but they are spread across GOV.UK, HMRC manuals and DWP guidance, and they are rarely explained in plain English. The guides bring those rules together in one place, with the figures for the 2026/27 tax year.

It matters because much of the system pays out only what you claim. Allowances such as Marriage Allowance and benefits such as Pension Credit have to be applied for, a tax code can be wrong without you noticing, and some time limits can't be put right once they have passed. The guides explain UK rules from public sources — GOV.UK, HMRC and the DWP — and tell you which professional or free service to contact for your own situation. Two of the six guides are only available in the library.

The honest bit

A few honest notes.

This is the guide in the library where the stakes are highest and the gap between "ordinary family who muddles through" and "family with the paperwork done properly" is the largest. On a larger family estate, the difference can run to tens of thousands of pounds of Inheritance Tax.

That said — Inheritance Tax planning is the area where you most need a qualified professional involved before any significant decisions. This guide is the field manual that tells you what to discuss with your accountant or estate planner, what the structural options look like, and what to push back on if the advice you're getting doesn't feel right. It is not a replacement for that professional.

The "gifts out of normal expenditure from income" exemption in particular is one where the documentation matters enormously. A 2026 tribunal case (Hosking v HMRC) is a reminder that HMRC looks for a regular, documented pattern of gifts out of surplus income. The guide covers what HMRC will look for if they challenge — but the actual implementation in a specific family's case should be reviewed by a qualified estate-planning specialist.

This is general information, not personal advice.

Before you check out — one thing worth knowing

This guide is one of six in The Pension Library. The library covers the rest:

The HMRC letters every UK pensioner will receive — and how to read them
Capital Gains Tax, care fees, and the rules around the family home
The financial reclaims a widow or widower has to make in the first year
Lifetime gifts to adult children — without HMRC taking 40%
Inheritance Tax planning beyond the £1,000,000 shelter most couples have automatically
The handover pack your spouse, children, and executor will actually need

Bought separately, the four individual guides cost £800 together. The complete library is £297 and includes two guides not sold on their own.

Most pensioners reading this guide will recognise at least three of the six worries above. At three, the bundle is the better purchase. The maths is straightforward.

Get this guide — £225 Get the complete library — £297

Instant PDF delivery. Lifetime access.

Common questions

Is this regulated tax advice?

No. It's general educational information about UK tax law and IHT planning — the same category of content you'd find in a serious tax-planning book or in MoneyHelper's IHT pages, but pulled together as a practical playbook. For your specific family's situation, the next conversation is with a qualified accountant or estate-planning specialist. The guide tells you what to ask.

Will it work for someone with a very large estate?

The guide is written for ordinary UK families. If your estate is above £5 million, the structural options open to you (FICs, EBTs, complex trust arrangements) go beyond what's covered here. A specialist firm is the right next step, but the guide will still help you understand what they're proposing.

Are the figures current?

Yes. Figures are taken from GOV.UK for the 2026/27 tax year. The 2026 Business Property Relief changes and the April 2027 pension IHT inclusion are addressed in the relevant bundle-only guide (Inheritance Tax For Couples) — this guide focuses on lifetime gifts.

Does it cover Scotland?

Yes. Scottish-specific notes are included, particularly around legal rights and the differences in succession law. The IHT rules themselves are UK-wide.

What's the refund policy?

14 days, no questions asked. Email the refund address in the PDF and you'll get your £225 back.