11 September 2026 – written by Steffen Kemmerzehl – Friendly Assist Accountancy – The Accounting Hub
Parents paying university fees, sending money from abroad or thinking about buying a UK property? Most arrangements are perfectly manageable, but there are a few UK tax questions worth asking earlier.
Sending a son or daughter to university in the UK is already a fairly big family project. There are university fees to pay, accommodation to arrange, a UK bank account to open and usually a steady stream of money travelling from home to Britain.
For some families, there are investments or savings already held in the student’s name. Others reach the point where somebody looks at three years of accommodation costs and asks, “If we’re paying this much in rent, wouldn’t it make more sense to buy a flat?”
This is often where UK tax enters the conversation. The good news is that sending money to your child does not automatically mean there is a UK tax bill, but it is worth understanding what the money actually is, who owns it and what changes once the student starts living in the UK.
“My parents send me money every month. Do I have to declare it?”
A genuine gift or financial support from Mum and Dad is not simply turned into taxable income because it arrives in a UK bank account.
If parents overseas pay the university directly, transfer money for accommodation or send their child £1,500 each month for rent, food and everyday expenses, that does not automatically mean the student needs to complete a UK tax return.
There are also specific rules for students coming to the UK from overseas. Depending on the relevant double taxation agreement, foreign income or gains used for course fees and living costs may not be subject to UK tax. HMRC says it may ask for an account of living costs where these exceed £15,000 in a tax year, excluding course fees.
Where things become more interesting is when the money isn’t simply parental support. Perhaps the parents transferred an investment portfolio into their daughter’s name before she came to Britain, or a student has a sizeable savings account in India earning interest, shares in a family company in Hong Kong or investments accumulating in Singapore.
At that point, the useful question is what actually belongs to the student and what income those assets are producing.
“I didn’t realise my overseas account mattered in the UK”
This can catch people surprisingly easily because a student might have lived with their parents until coming to Britain and never previously had any reason to think about tax. They may nevertheless have investments, savings or other assets in their own name. Once someone becomes UK tax resident, overseas income can potentially become relevant to their UK tax position, including interest from a foreign bank account, dividends, investments, rental income or overseas earnings.
A Student visa and UK tax residence are two different things. Residence for tax purposes depends on the individual’s circumstances under the UK’s Statutory Residence Test.
This is similar to the issues that affect many people moving to the UK from Europe or elsewhere. The underlying question is usually not somebody’s nationality but where they are tax resident and what income and assets they have across different countries. For many students, there will still be very little to worry about. For somebody arriving with investments or assets already in their name, however, it is worth checking rather than assuming that being a student keeps everything outside the UK tax system.
A relatively new UK tax rule could also matter
There has been a major change since April 2025 which families coming to Britain may not know about. The UK now has a four-year Foreign Income and Gains regime, usually shortened to FIG. Broadly, someone becoming UK tax resident after at least ten consecutive tax years of non-UK residence may be able to claim relief on eligible foreign income and gains during their first four years of UK residence.
Imagine a student arriving in September 2026 who has lived overseas all their life but already has investments in their name which their family set up years ago. Their position could be quite different from another student arriving with a normal current account and receiving £1,000 each month from their parents.
There is another reason not to automatically claim FIG relief simply because somebody qualifies. A claim can mean losing the UK Personal Allowance and Capital Gains Tax annual exempt amount for that year, so the figures need to make sense.
Where foreign income does need reporting, this can also lead into Self Assessment. Establishing the position early is generally much easier than discovering several years later that income should have been considered.
“Why are we paying all this rent?”
This is probably the point where the student’s tax question becomes a family financial decision.
Parents may look at several years of university accommodation and decide that buying a flat seems more sensible. Perhaps they buy it themselves and allow their child to live there, give the student the money to purchase it, or help with the deposit. Sometimes the plan is for the student to occupy one room and rent another to a friend.
Before deciding whose name should go on the property, it is worth looking at what the family actually intends to do with it and the UK tax consequences.
For property in England and Northern Ireland, non-UK resident purchasers can face an additional 2% Stamp Duty Land Tax surcharge. There can also be another surprise because residential property already owned elsewhere in the world can count when considering the higher SDLT rates for additional properties.
A parent who owns the family home in China, India, Malaysia or elsewhere should therefore not assume that a UK flat is treated as their first property simply because it is the first one they have bought in Britain.
Ownership can matter later too. The student may stay in the property, the parents may rent it out after graduation, or the family might eventually sell it. If property becomes part of a wider investment plan, it is worth considering it alongside the family’s other UK and international tax arrangements rather than looking only at the initial purchase.
“We didn’t plan for them to stay in Britain”
Plans have a habit of changing during university. Someone arrives for a three-year degree, stays for a Master’s, receives a good job offer and several years later has built a life here.
Meanwhile, financial arrangements made when they were 18 may still be sitting in the background. There could be investments back home, money being transferred by parents or a UK property that was originally bought purely to provide somewhere to live during university.
That doesn’t mean families need complicated international tax planning before their child has attended their first lecture. It does mean that substantial investments, property purchases and transfers of assets are worth thinking through before they happen, particularly where several countries are involved.
The difference can be as simple as this: a monthly transfer from parents for ordinary living expenses may require very little attention, while a £400,000 property purchase or a sizeable overseas investment portfolio already held in the student’s name deserves a closer look.
Keep the paperwork
One practical thing families can do from the beginning is keep sensible records. If parents are transferring significant amounts, retain evidence showing where the money came from and what it was for, together with records of university fees, substantial gifts, overseas investments and property purchases.
This becomes particularly useful when larger sums are transferred for a property deposit or purchase. Something that is completely obvious to a family today may be surprisingly difficult to reconstruct four years later when a UK bank, solicitor, accountant or HMRC asks where the money originated.
You don’t need to turn university into a tax project
Most international students do not need an accountant simply because they have come to study in Britain. I wouldn’t want a family reading this to think that every transfer from Mum and Dad requires professional advice.
There are, however, situations where a short review can be genuinely useful. If parents are transferring substantial sums, the student already owns investments or receives foreign income, a UK property is being considered, or nobody is quite sure what becoming UK resident does to existing arrangements, those are sensible questions to ask.
Sometimes the answer really is that everything looks fine, you should keep the records and get on with university. In other cases, there may be something worth sorting out before money or property changes hands.
At Friendly Assist Accountancy, we regularly work with people whose lives and finances cross borders. If your son or daughter is coming to study in the UK and you have one of those “we’re probably fine, but I’d rather check” questions, get in touch with us.
Tell us briefly where the family is based, when the student arrived or is coming to the UK, and whether overseas income, investments, significant family transfers or property are involved. We can then have a look at the situation and tell you whether there is actually anything that needs dealing with.
I’m Steffen Kemmerzehl, an AAT Licensed Accountant at Friendly Assist Accountancy. I work with UK and international clients on tax residence, overseas income, pensions, property and other cross-border UK tax matters.
Please get in touch if you’re interested in arranging an appointment.
Useful resources
HMRC: Tax on foreign income if you come to study in the UK
HMRC: Foreign Income and Gains (FIG) regime
HMRC: Higher rates of Stamp Duty Land Tax for additional residential properties