How to gift money to grandchildren living abroad (UK guide)

Gifting your grandchildren money is more than a thoughtful gesture – it can help them navigate life for years to come. Perhaps you’re planning to help them set up for life as an adult, or celebrating birthdays, graduations, or religious holidays like Christmas, Diwali or Eid.

Whatever the reason, you’ll want to make sure as much of the gifted money makes it to them as possible. And this can be a little trickier if you’re sending money overseas and dealing with multiple currencies.

Here, we show you how to gift money to grandchildren abroad. And if you haven’t already, check out the Wise account. It’s a multi-currency account that lets you send money to 140+ countries in 40+ currencies with the mid-market exchange rate (and no exchange rate markup).

➡️ Learn more about the Wise account

Disclaimer: The information in this article is for reference purposes only. All information on this page should not be considered financial or tax advice. You are also solely responsible for calculating and paying your tax liabilities depending on the applicable law.

Understanding the basics of gifting money internationally

Sending money internationally, particularly if it’s a large sum, or you’re sending it to someone for a special day, can be a worry. You want to be sure it arrives safely, on time, and that your recipient receives the full sum. You also want to avoid hidden fees, that means your grandchildren get less of what’s sent.

Now, with modern money service providers, gifting money internationally is easier. You don’t have to go through a traditional bank or face high markups on exchange rates.

Solutions like the Wise account make it possible to send money at the mid-market rate, in a range of currencies, so that it’s ready to spend in a matter of minutes. Of course, transaction speed depends on individual circumstances and may not be available for all transactions.

Let’s look at your options for sending money overseas.

What are the rules for gifting money to grandchildren in the UK?

You can give away up to £3,000 in gifts tax-free, each year. This is the annual exemption, and is the total amount you can gift without having to pay inheritance tax. Birthday and Christmas gifts given from regular income are inheritance tax exempt.

It’s worth noting that you can carry through any unused annual exemption into the following tax year. So, if you only used £1,500 of your annual exemption in the last tax year, you’d have an additional £1,500 in annual allowance for the current tax year. That’s a total of £4,500.

Gifting money to grandchildren overseas: Key considerations

When gifting money to grandchildren, consider what you’ve already gifted within the tax year. Perhaps you have a grandchild who has graduated the same year as an important birthday or married in the same year.

If this is the case, any money that brings you over the inheritance tax threshold will be subject to tax. Note that gifting your belongings or household items, stocks and shares, or land and property is also subject to inheritance tax, and will contribute to your annual exemption threshold.

Also, think about the occasion. Money gifts for marriage and civil partnership for grandchildren are exempt up to £2,500. You can combine wedding and civil partnership gifts with your annual exemption amount of £3,000 for a larger gift of up to £5,500 too.¹

Navigating tax and inheritance rules for overseas gifts

We’ve already touched on UK inheritance tax rules, but let's take a closer look, since this is the tax most likely to affect overseas gifts to your grandchildren. If you need some help navigating the rules, it’s always a good idea to speak with an accounting professional.

Inheritance tax and gifting to grandchildren abroad

Inheritance tax is paid on gifts exceeding the annual exemption amount of £3,000. If you’ve gifted a total amount higher than this threshold, you could be subject to inheritance tax. You can find the inheritance tax rates on the GOV.UK website.

For smaller amounts, you can give as many £250 gifts per person as you like each tax year, providing you’ve not used any other allowances on that person. You can also make regular payments to a person, providing they’re part of your regular monthly income and you can continue meeting your own costs.¹

Annual gift allowances and exemptions for UK residents

Let’s recap some of the allowances already covered, and take a look at the exemptions for UK residents:

• Annual exemption: £3,000
  • You can carry any unused amount forward to the following tax year
• Small gift allowance: £250 per person
• Gifts for marriage or civil partnership: £2,500 per grandchild

How does the 7 year rule affect gifts to grandchildren living abroad?

If you give a gift and live seven years after giving the gift, there’s no inheritance tax due. But, if you die within seven years of giving the gift, the amount of inheritance tax due will depend on when the gift was given.

Gifts given within three years of death are subject to 40% inheritance tax. A sliding scale applies to gifts given within 3-7 years of death.¹

This is known as taper relief, and only applies if the total sum of gifts given in the seven years before death exceeds the £325,000 tax-free threshold.

If you give away more than £325,000 in gifts in the last seven years of your life, the inheritance tax liability passes onto the recipients of those gifts. Meaning, your grandchildren may need to pay inheritance tax on any gifts received during that time.

Do you need to declare gifts to grandchildren living abroad?

If you exceed the £3,000 annual exemption, yes.

It’s best to keep a record of any gifts given to grandchildren living abroad. Inheritance tax may need to be paid if these gifts are given in the last seven years before death, and you exceed £325,000 in gifts. Make sure you record the amount gifted, and the date it was given.

How to send money abroad for grandkids or family

Thanks to modern money transfer services and international payments, you have plenty of options for sending money abroad to grandkids. Make sure you do your research to avoid hidden fees and ensure your grandchildren get as much of the gift as possible; sending in a different currency or using a high-free provider means less of what you send will make it to your grandchildren.

Bank transfers vs. specialist online money transfer services

Bank transfers can be a handy way to send money domestically, but if you’re using multiple currencies and sending money internationally, exchange rate markups and high fees can erode the total sum.

Specialist online money transfer services are fast, can often provide better rates compared to banks, and are simple to use. Here are some things to consider:

Bank transfers	Specialist online money transfer services
Hidden exchange rate markups that take a bite out of your gifted amount	Mid-market exchange rates that give your recipient more of the money (this is the rate Wise uses)
Some banks have extra fees like intermediary bank fees, receiving fees, and urgency fees that quickly add up	Many providers such as Wise offer low, transparent fees*, so you know exactly what you’re paying before sending money
Some banks may use legacy networks to send the money which can be slower	Typically faster, with money often arriving in minutes, not days
Depending on the bank, they may not have a dedicated service for large international payments	Lower fees on large amounts (for example if you use Wise, there are discounted fees the more you transfer)

Setting up a trust for grandchildren living overseas

A less direct way of gifting money to grandchildren is setting up a trust for them. This trust can be used to hold money, property, or investments for their future. And, you can control when these assets are released to them.

You can give grandchildren access to the trust at a specific age, where the assets can be used to set them up on the right foot into adulthood. If you decide a trust is the best option, it’s worth getting help from a solicitor and an accounting professional to make sure your trust is set up properly.

Supporting their education or property purchases abroad

If you’re planning to send a large sum to help your grandchildren through education, or enable a property purchase abroad, you should factor in the currencies and exchange rates.

Figure out how to sum converts into their local currency, and whether this aligns with the amount of money you wish to gift. Exchange rates change frequently, and a favourable rate can make a big difference to the amount your grandchild receives. You can use the live Wise calculator to get an estimate.

Wise also has a large transfer team, who are specifically trained to help guide you through the processes and can support you with sending larger amounts. Wise also discounts fees the more you send, so a larger gift can work out even more cost effective.

Considerations for large amount gifts to grandchildren abroad

When sending large amounts abroad to grandchildren, you not only need to think about the currency you’re using, but the currency you’re converting to. Making sure you get a fair exchange rate and avoid high conversion and bank fees is vital if you want your grandkids to get their fair share.

Make sure you’ve also taken note of any inheritance tax obligations and recorded the gifts you send. Look beyond traditional banks for fair fees and exchange rates, too.

Going through Wise is safe, easy, and saves you considerable money on fees. With support for global currencies, you can send money thousands of miles, safe in the knowledge that it will arrive securely with your grandchildren.

Want to squeeze even more out of your money gifts? Earn returns on GBP, EUR and USD currencies by opening a Wise account and investing in a fund that holds government-guaranteed assets. Capital at risk, growth not guaranteed.

Simply turn on Wise Interest in your account and start with just 1 GBP, 1 EUR or 1 USD. You can also continue to send and spend your money, so no need to lock your money away.

Learn more about Wise Interest

Investments can fluctuate, and your capital is at risk. The Variable rate is based on the performance of the Fund over a 7-day period ending on 9/26/2025. The Fund has achieved an average annual return of 2.76% over a 5-year rolling period exclusive of fees. Interest is offered by Wise Assets UK Ltd, a subsidiary of Wise Payments Ltd. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you're uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.

Ready to send your gift? Get started with Wise

Sending a gift to your grandchildren can be simple, wherever they’re based, and however much you decide to gift them. And money can be one of the most purposeful, useful gifts you can give them. It’s a great way to show you’re there for them, even if you’re hundreds of miles away.

Choosing the right money services provider can make a significant difference to how much your grandchildren receive, so be sure to do your research here.

Signing up for a Wise account is a great first step. You can get the mid-market rate, minus the markup that many banks add on top. And, you can send money to 140+ countries.

So, no matter how far your flock flies, and whether you’re sending euros, dollars, or another currency, you can be sure it’ll reach them safely and speedily.

➡️ Learn more about the Wise account

Sources used in this article:

1. Gov.uk - How inheritance tax works

Sources last checked on 27th October 2025