Worry over gift to grandsons

By THIS IS MONEY
Updated:

 

I am considering buying some unit trusts for my two grandsons aged six and 15 months. I understand that I could hold the investments in my name but use their initials as a designator. Would the investments be considered as part of my estate and be subject to inheritance tax when I die?EP, Chandlers Ford, Hampshire

Mark Dampier at financial experts Hargreaves Lansdown replies: In terms of inheritance tax you are allowed to give away £3,000 each year. You are also able to backdate so technically you could give away £6,000 if you haven't used your allowance for the previous year. So providing you are within this limit I cannot see a problem.

I would recommend you registered this intent with the Inland Revenue so as to avoid any potential confusion later on.

Do bear in mind that by creating this simple trust the grandchildren will be able to have the money at 18.

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