The cost of accommodation is probably the biggest financial burden for any student. If you can provide funds to buy a home near the University the annual maintenance to your off-spring can be reduced and the property should generate a tax free profit by graduation.

The home can be purchased using a University is loan secured on your own home, or with expensivel capital provided directly by yourself. In either case the property must be transferred to the adult student to allow him to take advantage of the capital gains tax exemption for his own home. When the home is sold you can recover your capital from the proceeds, backed up by a charge on the property deeds. If you wish to give the capital without strings attached the gift will only be subject to inheritance tax if you die within seven years of the transfer.

If the property is in a designated disadvantaged area you may be able to save stamp duty on the purchase.

The student can generate up to £4,250 tax free income per year by letting rooms to friends under the rent-a-room scheme. Any excess rent above this limit is taxed but may be covered by the student's personal allowance of £4,615. If there are only students living in the house there is no council tax to pay on the property.

Rather than supplying regular handouts to keep the student in books and beer during term time, consider investing capital in your child's name at the beginning of the course. Such a gift will transfer income and gains normally taxed at 40% in your hands to be covered by the student's capital gains exemption of £7,900 and his lower income tax rates of 10% and 22%.