AN innovative partnership has been launched to support families with pupils at a West Yorkshire independent school while enabling their grandparents to reduce their inheritance tax liability.
Integrated commercial law firm, Lupton Fawcett, Leeds, and The Grammar School at Leeds (GSAL), where fees are £10,000 a year have created the partnership to help grandparents of pupils to use equity from their homes to pay their grandchildren’s fees at the 2,200-pupil school and cut the inheritance tax payable by their own children when they die.
The initiative, devised by wills and trusts specialists at Lupton Fawcett LLP, East Parade, as part of its Law of Advantage approach, is one of the first of its kind in Yorkshire and aims to help families who may need additional support with school fees while the economic recovery remains slow and unemployment is rising.
Director and head of Lupton Fawcett’s Wills, Trusts and Estates Department, Duncan Milwain, says; “The timing of the economic crash after 15 years’ growth means that some retired people are comparatively well off while their adult children are struggling with rising inflation, pay cuts and, in some cases, short-time working.
“The threat of redundancy is also a very real one for many people. This can put significant pressure on parents who are planning to send their children to an independent fee-paying school.
“A generational chasm is developing between that generation and the better-off retired who have equity in their homes and may also have sizeable pension pots. For these people inheritance tax can be a headache – an individual’s threshold is £325,000 – over this figure tax is payable at 40 per cent. There are large parts of West Yorkshire where simply owning a property can put people over this threshold and into the tax regime.
“Some grandparents are already stepping in to narrow this chasm by helping their family meet costs such as holidays and providing or supplementing deposits for home-buying.
“This tax-efficient initiative reflects a further way in which grandparents can offer practical financial support to their families now and to significantly reduce the inheritance tax payable when they die. Many will no doubt feel that it is an extremely worthwhile investment.
“It is however important that any planning carried out by a family is not dealt with in a vacuum – it should take place in the context of all the family circumstances.”
GSAL financial director, David Naylor, says: “We recognise that school fees are a significant financial commitment and are constantly looking for ways to help families fund their children’s education. This partnership with Lupton Fawcett is an example of two leading institutions working together to support families across the region.”
Commercial and family law firm, Lupton Fawcett, which has been practising law for more than 100 years and also has an office in Sheffield, launched its Law of Advantage approach to deliver innovative and practical, game-changing legal work to its clients.
As always, Lupton Fawcett is on hand to offer further advice, so please contact Duncan Milwain on 0113 2802097 or e-mail Duncan.milwain@luptonfawcett.com
Tags: Duncan Milwain, financial support, Grammar School at Leeds, GSAL, inheritance tax liability, Law of Advantage, Lupton Fawcett, tax efficient initiative, wills and trusts specialists