Can grandparents pay for Education from overseas?

[smargolis]

Hi, I'm trying to figure out how to afford private secondary education for DS (best option for the moment) and my mother offered to help. She is retired and is lucky to receive a good pension with enough money left each month to be able to afford it from her own income. Could she pay for it through monthly deposits into the school account? Does it make any difference if the money is sent to my account or to the school account? Are there any tax implications for our family in the UK? I haven't had time to look into it yet, so just hoping one of you might have experience with this. Thank you very much!!

[LondonExpatLife]

You'd have to talk to a tax consultant about your mother depositing money into your bank account. Would that be considered income by UK tax authorities? The best thing is for her to probably wire payments to the school when they are due.
Private school tuition is not tax-deductible - unfortunately.

[BubblesBuddy]

In this country you can make gifts to grandchildren and they come off your estate for inheritance tax purposes. If grandparents are abroad I don’t know what the rules are but I know they can pay for school fees if they wish. Direct to the schools is best as it’s not a lump sum gift to you, avoiding inheritance tax However do make sure she won’t need the money anytime soon or you could be in a financial mess regarding the fees and where your DC will end up in school. This happened to a friend of money where grandparent stopped paying because they needed the money for care in their home.

[LondonExpatLife]

In the US you can also give gifts - I believe annual allowance is $14k. Donor would pay gift tax but any amount over could be excluded with the lifetime credit that is over $5 million. Paying tuition directly to school is exempt as well.
So if money is coming from the US, I don’t think you have tax implications to worry about. UK - do school track who pays tuition - meaning source; parent or someone else?

[smargolis]

Thank you both very much for the advice! Money would come from Brazil, and I’ll ask her to pay it directly into the school account, as it seems more straightforward. In Brazil, you are allowed to send money abroad to support family members up to a certain amount that would be within our school costs. And yes the school asks for details about the source of the money but this shouldn’t be a problem. If for some reason we stop receiving this help, we could still afford the school fees but would need to cut down on other costs. Thanks again!!

[Rudi44]

Do make sure to see if you qualify for any bursary based on your income and not including the grandparents assistance.