Gifting children’s allowance - Tax implications

R

Runner1

Registered User
Messages
34
we have just welcomed our first born in the last few weeks. I am looking at saving children’s allowance plus an additional €100 a month into a savings account for our daughter (EBS children’s saving account). The plan would be to do this until she is 18 to put towards college/car/property or whatever else. As this will fall under the €3000 per year CAT allowance, is there any issue with her taking control of the account if there is cash leftover from a gift tax perspective I.e €240 X 12 X 18 = €51,840, so if €20k is used, would the 31k left be considered as a gift or would it be considered as all falling under the cumulative amount gifted each year?
I would be opening account in both our names.
Thanks in advance
 
it's all covered as stated however I think the children's allowance is in fact owned by the child and not the parent. If this is so then you are in fact not gifting that amount to them yourself.
 
Interesting, I thought it was given to the mother specifically to spend for the benefit of the child. Glad that it looks like it doesn’t have any complications anyway. Thanks for the responses
 
So if I keep collecting the children's allowance for my child over an 18 year period and hold it in cash or whatever, can I then give it to the child when they reach a certain age tax free?
 
noproblem said:
So if I keep collecting the children's allowance for my child over an 18 year period and hold it in cash or whatever, can I then give it to the child when they reach a certain age tax free?
Click to expand...

That was my original question, put more concisely I must say!
Is it considered you are giving them the full amount at one time or if the account is in both your names that you have been gifting them under €3k each year?
 
The money needs to be moved each year into an account in the child’s name or into a simple bare trust. The life companies operate bare trust products where you can invest a regular amount in the child’s name. A bare trust is simply an arrangement where one person acts as nominee or legal owner for someone else’s assets. That someone else remains the beneficial owner of the assets. Examples would be where a solicitor purchases a property as nominee for someone to preserve their anonymity, where a stockbroker holds shares for an investor, or where an adult holds an investment for a child because children can’t enter into contracts.
 
I am not 100% but it was my understanding that the children's allowance is owned by the child. A parent is the child guardian
 
From the Citizens Information website:

'Child Benefit is payable to the parents or guardians of children under 16 years of age. It is paid for children under 18 years of age if they are in full-time education.'

It does not belong to the child. But most people would consider that it is intended to be used for the child. So whether you buy nappies, or ballet lessons, or save for college, doesn't matter. We all know that €140 per month is a drop in the ocean.
 
You must log in or register to reply here.
Menu
Log in
Register