Are children taxed in the same way as adults?

Brendan Burgess

Brendan Burgess

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If a father has a property worth €200k on which he collects €10,000 a year rent, can he just gift the property to his 5 year old son?

Would the income be tax-free in the son's name?
 
Hi Brendan,

I'm not a solicitor but as I understand it children can't buy property so effectively the parent has to buy it and place it in trust for the child and this is not effective for tax purposes while the parent is alive.

But I'm sure that one of my learned colleagues will be along with a more comprehensive reply.
 
This link seems to suggest that one can put a property in a child's name without having a trust or company but I could be reading it wrong or missing something. They talk about
Property bought in the child’s name only with parents acting as guarantors on the loan.
Click to expand...

and separately about holding one in a trust or company for the child...

[broken link removed]

In any case it doesn't deal with the issue of rental income on a property held in a child's name.

I know that covenants were a good way to give money to kids tax free (and with tax relief to the donor and recipient) but I don't know if it was just because it was generally under the income tax exemption threshold for the child or because they had allowances/credits that rendered the gift tax free...?
 
ClubMan

That link does not work for me.

If there are some restrictions on them owning a house, there is definitely no restriction on them owning shares.

So if a father wanted to divert some taxable income to his son, the son could invest in shares. That would probably be better anyway in that the investment horizon would be long enough for shares and very little management is required.


Brendan
 
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