The tax year-end deadline on 5th April is fast approaching, which means there’s still time for grandparents to make a meaningful financial difference to their children and grandchildren. Whether it’s helping to fund their future, reducing inheritance tax liabilities, or making the most of tax-free allowances, acting now could have long-term benefits for your family.
If you are a grandparent, here are five key ways you can make the most of the tax year-end deadline.
5 Top Tips
1. Gift Money to Reduce Inheritance Tax (IHT)
If you’re thinking about passing on wealth to your family, gifting money before the tax year ends can be a smart move. Each tax year, you can give away up to £3,000 per person using the annual gift exemption, without it being subject to Inheritance Tax (IHT). If you didn’t use last year’s allowance, you can carry it forward, meaning you could gift up to £6,000 this year.
Additionally, you can make small gifts of up to £250 to as many people as you like, provided they haven’t already received a portion of your £3,000 exemption. Over time, these gifts can significantly reduce the value of your estate and, in turn, potential IHT liabilities.
2. Top Up a Grandchild’s Junior ISA
A Junior ISA (JISA) is a great way to help your grandchildren build a tax-free savings pot for their future. The current annual allowance for a Junior ISA is £9,000, and contributions can be made by parents, grandparents, or other family members.
Funds inside a JISA grow free from tax, and once your grandchild turns 18, they’ll gain full access to the money. This could help them with university fees, buying their first home, or giving them a financial head start in adulthood.
If you want to contribute, it’s best to act before 5th April to ensure this year’s allowance is fully used.
3. Contribute to a Grandchild’s Pension
It may seem early to think about retirement for a young child, but setting up or contributing to a Junior Pension could be one of the most tax-efficient gifts you give them.
Each tax year, up to £2,880 can be contributed into a child’s pension, and the government will automatically add 20% tax relief, boosting the total to £3,600. Over the long term, with compound growth, this could make a significant difference to their retirement savings.
While they won’t be able to access the money until at least age 57 (as rules stand today), it could provide a strong financial foundation for their future.
4. Help a Grandchild Get on the Property
With house prices remaining high, many young people struggle to save a deposit for their first home. Grandparents can help by contributing to a Lifetime ISA (LISA), which is designed for first-time buyers.
Each year, up to £4,000 can be saved into a LISA, and the government adds a 25% bonus, meaning a maximum boost of £1,000 per year. If your grandchild is aged 18-39, they could be eligible for a LISA, and any contributions made before 5th April will count towards this tax year’s allowance.
Supporting them with this can speed up their homeownership journey and reduce reliance on expensive mortgages or loans.
5. Support Your Children with Pension Contributions
It’s not just grandchildren who can benefit – if you want to support your own children financially, helping with pension contributions is a great way to do so tax-efficiently.
Contributing towards their pension can be a tax-smart way to transfer wealth, as any personal pension contribution benefits from tax relief at their highest rate. If they are a higher or additional-rate taxpayer, they can claim extra tax relief, making it an even more attractive option.
Unlike direct cash gifts, this also ensures that your support is locked away for their future, rather than being spent immediately.
Act Now Before the 5th April Deadline
With the tax year-end fast approaching, now is the time to take action and make the most of these tax-efficient opportunities.
If you’d like advice on gifting money, tax planning, or making contributions to ISAs or pensions, our team at Citrus Financial is here to help.
The value of pensions and investments can fall as well as rise. You may get back less than you invested.
For ISA’s Investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA managers.
You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.
By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme, or personal pension scheme:
- you may lose the benefit of contributions from your employer (if any) to that scheme; and
your current and future entitlement to means tested benefits (if any) may be affected.
Tax treatment varies according to individual circumstances and is subject to change.
Stocks and Shares ISAs invest in Corporate bonds; stocks and shares and other assets that fluctuate in value.
Taxation advice is not regulated by the Financial Conduct Authority.
Approver Quilter Financial Services Limited & Quilter Mortgage planning Limited 12/02/2025
About the author: David is a highly regarded financial expert, known to many as BBC Radio Kent’s “Money Mentor,” where he shares practical advice and insights on managing money effectively. As the founder of Citrus Financial, David has built a reputation for providing tailored financial guidance to individuals and families, helping them achieve their financial goals with confidence.
You can hear more of David on BBC Sounds.
