How to leave inheritance money for your children

How to leave an inheritance to your children

Share this article on:

Planning for your children’s future is important but passing money on to them can often come with the worry of inheritance tax. It’s understandable that you would like your children, or grandchildren, to inherit as much money as possible and ensure they are financially comfortable. After all, we all like to spoil our loved ones.


Planning for your children’s future
The first step is to figure out the right option for you and your family. There are many different ways you can leave inheritance to your children or grandchildren. Some of the most popular options include:

  • Gifting them the money. Everyone has an annual tax-free gift allowance of £3,000, meaning you could simply hand money to your children each year to help prepare them for their future, without any of the money you give being subject to tax.
  • Putting your money into a trust. A trust establishes a fund that will be managed by a trustee (such as a dependable friend or family member). Your children (the beneficiaries) typically gain control of the trust once they turn 18.
  • Setting up a Junior ISA. A Junior ISA is a quick and easy way to save money, tax-free, for your children until they turn 18 at which point, they gain control of the account.


What is a Junior ISA?
A Junior ISA works in the same way as a regular ISA, in that it is a tax-efficient way of saving or investing money. The main difference is that a Junior ISA is created specifically for under 18s, helping you give your little ones a head-start in life without eating into your own ISA allowance. You can save or invest up to £4,260 a year into a Junior ISA account for each child, and they’ll be able to access the funds once they turn 18.

A Junior Cash ISA is a standard savings account enabling you to put money aside for your child without them paying tax on any interest earned. Similarly, a Junior Stocks & Shares ISA will help you invest your money in shares and other assets and your child won’t pay any UK tax if they make positive returns.

If you’re concerned about inheritance tax on any money you are planning to leave for your children, a Junior ISA could be a good solution to put up to £4,260 a year aside for them.


What to do if you receive an inheritance
Although it may be tempting to enjoy the immediate benefits of receiving a large sum of money, investing some or all of it for the future could set you up for years to come. If you have inherited money, here’s a few ways to help get your finances in shape before you head for the shops:

  • Pay off any debts or mortgage. You should aim to pay off any unsecured debts, like a student loan or credit cards first. Then, if your inheritance allows, perhaps you could enjoy a mortgage-free life too.
  • Use your tax-efficient ISA allowance. Investing your money into a Junior ISA for your kids, or a Stocks and Shares ISA for you, is a good way to plan for the future. However, before you invest, ensure you have a good emergency cash savings fund set up – three months’ worth of outgoings is usually recommended.
  • Invest in property. Buying a property to rent out is another way you could utilise your inheritance and plan for the future.
  • Think about your children. If you have a family, or are planning one, why not set some of the money aside for their future, too, with a Junior ISA?
  • Give to charity. Perhaps one of the most rewarding things you could do with your inheritance, and it’s also tax-efficient.


However you decide to plan financially for the future, make sure you set out your goals work out the best ways to achieve them - whether it’s with cash savings, investing, property or a combination of all three!

If you do decide to make investing part of your future plans, but would like a helping hand getting started, services like Wealthify are there to create and manage an investment plan on your behalf.


The tax treatment depends on your individual circumstances and may be subject to change in the future.


Please remember the value of your investments can go down as well as up, and you could get back less than invested.

Investing is for everyone.
Including you.

Wealthify is the new way to invest your money.

Try it now With investing your capital is at risk

The comments and opinions expressed in this article are the author's own and should not be taken as financial advice from Wealthify.

Try investing with Wealthify
Share this article on:

Wealthify Customer Reviews

4.36 Average

331 Reviews


Wealthify have delivered excellent customer service for me when I needed some help transferring my general investment account to an ISA plan. I've also opened 2 Junior ISAs because I think its important to start investing for my children early. I really like the way their communications are really clear and informative. I've not had any problems as yet. I'm expecting my money to go down a bit as we are facing issues with uncertainty around Brexit etc... but investing is something I am hoping to do for a long time and I hope that this is something I will reap the benefits of especially for my children.

Posted 2 days ago


Excellent Service

Posted 1 week ago


The app and investment options seem good and all, but my reason for leaving a review was the amazing customer support I received. I spoke to Rhiannon Maggs and she was wonderful. The perfect person to talk to. She was kind, professional, helpful, and she replied instantly. I'm leaving this hoping that possibly someone in a managerial position may see this and be able to give her what she deserves. Honestly from my experience she is the perfect employee and should be rewarded. Thank you Wealthify, and thank you Rhiannon!

Posted 6 months ago

Albert Millis

My experience with Wealthify has been fantastic so far. The website is easy to use and the customer service are very responsive. Additionally, I had some issues with the app not working, so I emailed the team and they got back to me really promptly, not only fixing my issue by addressing the app issues and getting them fixed too!

Posted 7 months ago


Great service. Quick responses from customer. Steady performance from the investment team.

Posted 8 months ago

Matthew Tanner

Easy to setup and use, simple charging structure, well balanced investment portfolios, easy withdrawal and lovely people.

Posted 9 months ago

Read more reviews at