I have come into some money and would very much like to help my kids. I know there are tax problems with gifting money to your children but are you allowed to put money into an offset account attached to their home loan?
There is no gift tax in Australia so you are free to gift as much as you wish to your children without penalty. However, you need to bear in mind that gifts in excess of $10,000 a year would adversely affect any Centrelink benefits you may be entitled to. Lending money to your children to place in their offset account is a splendid way to help them as it enables them to receive the interest on the money effectively tax-free.
My husband and I recently enlisted a lawyer to prepare our wills. My husband has funds in a term deposit that he will leave to me upon his death — I have no cash due to bankruptcy two years ago. As my husband is very ill, the lawyer suggested the money be left to the children as trustees so as not to affect my insolvency, and then eventually passed to me. Is this the best way to go about it? We do not own any property or shares.
Your lawyer's advice sounds reasonable provided you are happy with the decisions your children make when they become trustee of the funds. It is good advice for anyone who is in a situation where the beneficiaries may be subject to potential claims on their assets.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice before making decisions. Email: email@example.com.