{"id":11876,"date":"2026-03-05T11:32:29","date_gmt":"2026-03-05T11:32:29","guid":{"rendered":"https:\/\/www.wealthtime.com\/advisers\/?post_type=blog&p=11876"},"modified":"2026-03-17T12:46:13","modified_gmt":"2026-03-17T12:46:13","slug":"childrens-pensions-using-the-3k-iht-annual-gifting-exemption","status":"publish","type":"blog","link":"https:\/\/www.wealthtime.com\/advisers\/blog\/childrens-pensions-using-the-3k-iht-annual-gifting-exemption\/","title":{"rendered":"Children’s pensions: Using the \u00a33k IHT annual gifting exemption"},"content":{"rendered":"\n

Claire Trott, Technical Connection<\/p>\n\n\n\n

Using the \u00a33,000 annual inheritance tax gifting exemption to contribute to a child\u2019s pension is a highly tax\u2011efficient way to pass on wealth. These contributions benefit from pension tax relief and can grow significantly over time through long\u2011term investing and compounding.<\/p>\n\n\n\n

Utilising the \u00a33,000 inheritance tax annual gifting exemption is a great way to pass on funds tax efficiently to the next generation. One of the most tax efficient ways to do this is by making contributions to children\u2019s pensions, because of the benefit of tax relief.<\/p>\n\n\n\n

Tax relief is granted on pension contributions, even if you don\u2019t have any earnings, up to \u00a33,600 gross, which is \u00a32,880 net \u2014 so within the annual gifting exemption.<\/p>\n\n\n\n

The \u00a33,000 is per tax year and can be carried forward for one year if not used. So if no gifts have been made in the last couple of years, now is the time to make sure that these exemptions are not lost. Making a pension contribution for two children will use this and get them on the pensions ladder.<\/p>\n\n\n\n

Pension contributions paid are only tested against the receiving individual. This means they have no impact on the amount of pension contributions that can be made by the individual actually funding the contribution.<\/p>\n\n\n\n

Getting contributions into a child\u2019s pension restricts access for a number of decades, but it also will show the child the power of investing and compounding when they finally get to see what has been saved in their account.<\/p>\n\n\n\n

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\"Claire<\/figure>\n<\/figure>\n<\/div>\n\n\n\n
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If no gifts have been made in the last couple of years, now is the time to make sure that these exemptions are not lost.<\/p>Claire Trott, Technical Connection<\/cite><\/blockquote><\/figure>\n<\/div>\n<\/div>\n\n\n\n

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