Taking advantage of gift exemption for child

Wheety · 11-07-2019 4:39pm #1

This may have been discussed before so I would appreciate a link or perhaps just reply in this thread

We expecting a baby and I mentioned to my wife that we could set up a savings or investment vehicle for them. We could put €6,000 a year into it between us.

Does anyone have any idea of examples of this, what companies offer it etc? As far as I know the account has to be in the child's name and it's not something we can dip into, otherwise it's not really a gift.

Does the child automatically have access when they turn 18 or can we specify an age? Most 18 year olds wouldn't be the wisest with €108k (plus interest or gains).

Has anyone else done this? Is it a good idea?

thegolfer · 11-07-2019 6:34pm

You're on the money already. Annual gift exemption is 3000 in any one gift from any one individual, so the child can get multiple gifts from many people annually.

Best would be to document the gifts, to the child, and a bank account could be set up in trust for the child. Any income would be interest assuming a deposit account. And subject to dirt.

If an investment account, then further income or gains could be expected, however may not be that detailed.

The best method is really to document this for the child, in the event of enquiry from Revenue.

tuisginideach · 14-11-2019 9:41pm

Similar question - does that gift not need to be documented (and lodged in the child's name)? I can't see any reference to that on
https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/cat-treatment-receipts-by-children.pdf

If you can just hand them €3000 cash, couldn't you just as easily hand them €30000 cash if you had it and no-one would be any the wiser?

relax carry on · 14-11-2019 9:46pm

tuisginideach wrote: »

Similar question - does that gift not need to be documented (and lodged in the child's name)? I can't see any reference to that on
https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/cat-treatment-receipts-by-children.pdf

If you can just hand them €3000 cash, couldn't you just as easily hand them €30000 cash if you had it and no-one would be any the wiser?

Well that's something that can be applied to pretty much every taxable transaction. Unfortunately Revenues annual reports and quarterly publication lists are full of those who may have had similar thoughts. The cost of getting caught from interest, penalties, possible publication and/or prosecution tends to put some people off.

tuisginideach · 14-11-2019 10:53pm

The fact that I couldn't afford it would put me off! But to go back to the original question - does it have to be documented/designated for a named person etc? And if it has to be documented, who documents it - Is just the bank account in the child's name sufficient - with no more than €3000 being lodged from any one person in a calendar year?

relax carry on · 14-11-2019 11:16pm

tuisginideach wrote: »

The fact that I couldn't afford it would put me off! But to go back to the original question - does it have to be documented/designated for a named person etc? And if it has to be documented, who documents it - Is just the bank account in the child's name sufficient - with no more than €3000 being lodged from any one person in a calendar year?

It's not expressly stated that it must be documented etc but it's no harm to have some sort of evidence of the transfer documented in case during a Revenue intervention the transfer was queried.

namenotavailablE · 14-11-2019 11:17pm

Would such a scenario (parent providing funds to a child) not be covered by this relief if it's within 'normal spending' i.e. not so much buying a Porsche for a youngster as setting up a college fund for him/ her :-)

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/exemption-for-support-maintenance-and-education-payments/index.aspx

Taking advantage of gift exemption for child

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