Paying Fees and Tax Savings

[lefol]

Hi All,

I read somewhere that you can save on indie fees if you are a high rate tax payer or save on your pension etc.... Sure I am not the only one who read this..anyone else heard of this?

[hermanmunster]

used to be able a long time ago - not sure if you can now?

[guest43]

Certainly not directly..but there may be some scheme, that may or may not have merit, that involves saving towards independent school fees that has some tax advantages.

[hermanmunster]

the only one I can think of is if you pay the school up front for several years fees then you get a discount which may be greater than the interest (heavily taxed) which you would get from investment of the money. useful if you have some money saved up.

[sherry_d]

I saw that scheme on one of the boarding schools and was only left wondering how on earth someone affords quarter of a million in advance . It seems some people live from a very diff universe than the one I live in where average wages is £25K.

[hermanmunster]

I think it is more a case of when someone else is paying towards the fees eg grandparent or if there has been a fees saving plan which matured.

[Loopyloulou]

Grandparents can set up a trust fund for grandchildren. Income from the trust can be treated as being the grandchild's income and therefore taxed at (presumably) 0% or 20% instead of the 40% or 50% payable had the grandparents kept the monies themselves. Also potential inheritance tax advantages. Must be grandparents though - apparently it doesn't work for parents.

[hermanmunster]

Grandparents can set up a trust fund for grandchildren. Income from the trust can be treated as being the grandchild's income and therefore taxed at (presumably) 0% or 20% instead of the 40% or 50% payable had the grandparents kept the monies themselves. Also potential inheritance tax advantages. Must be grandparents though - apparently it doesn't work for parents.

yes if parents do this then any income over £100 is treated as the parents income and taxed accordingly.