How do I prove that I made a gift to my children?

Very good article. Very informative.

My own position. Assume the annual exemption is wise from a tax perspective into the future.

I want to start the annual gift exemption for 2 of my children. I am not interested in a bare trust etc but have opened 2 online bank accounts each in their respective names to encourage them to save into this when given gifts etc I also intend to contribute annually to these account. I understand it is their money in their name, but am happy to educate them about the purpose of the savings and trust them. My intention would be at 18 for them to set up an investment account with an online broker with low fees and I may contribute with them into this for years to come and encourage them to contribute to it also to build a fund into the future for cars/deposit for house etc.

I suppose I have 2 questions on this.


1. Is having the accounts in their names sufficient proof for revenue that money is going to them and is within and the annual threshold etc (3000 per calender year)?

and

2. If I contribute the full annual amount for example (or above 80% of annual amount), could I also submit an IT38 from my ROS with their PPSN as beneficiary to prove within threshold annually and have a record of annual gift?

Thanks in advance

I'm not at all sure what it is you're trying to achieve here despite the longish explanation, but you can gift up to €3,000 / annum to anyone, related or not, without incurring or creating a tax liability.

IBAN to IBAN SEPA transfers where the transactions will appear on the relevant bank account statements with no further need for form filling?

You only submit an IT38 when you, as the recipient, receive 80% of your lifetime allowance of € 400,000 (from parents to child)

At € 3,000 a year that's quite a while away

We did something similar. The idea was, keep it simple. When mine were u18 we helped them set up a bank account each. We contributed 6k each year and it appeared on their statements as (parents initials) 2010etc gift. Yes, at that stage you're foregoing better interest rates but get the transfers going....
When each turned 18 We helped them set up a Degiro account and did a once-off purchase of all world index etf. We discussed and explained deemed disposal and future exit tax liability etc . . I set one up personally and ,through monitoring my own, can see the funds are doing nicely. We discuss these periodically. In subsequent years the 6k went annually into their respective bank deposit accounts and then they set up limited access term deposit accounts. We were in a position to do each yearly transfer in one go, so no drip feeding. They're still both u25 at the latter end of college and have contributed their own funds from part-time work also. It seems our openness financially, as parents, is having the desired effect, but only time will tell. Things could go wrong. In the meantime we'll keep communicating about good habits , delayed gratification, etc ....and they also enjoy their young lives ...and that's VERY important too. We have an "implied confidence and supply " arrangement. We afford them every opportunity , without controlling ,and they put the effort in.
So far , so good. Fingers crossed.

Thanks all.

jpd - thanks for clarification on IT38.
NotMyRealName - thanks for your reply, exactly what I was looking for as similar plan to mine I think. I like the parent initials and year with gift as reference. I might use that.

Just have a signed and dated written note on file that you are gifting them €6,000.

There was a case a few years ago where the Revenue went after a case where hundreds of thousands was transferred from parents to their son. They claimed it was communion and confirmation money, annual gifts from grandparents (deceased by the time of the case). A big failing in their argument was there was no documentation.

The Revenue aren't going to go after small cases of €3,000 a year, but a simply signed note is all that is needed.

Steven Barrett said:

Just have a signed and dated written note on file that you are gifting them €6,000.

Click to expand...

A signed page or scrap of paper is of limited or no evidential value. A surviving email record would suffice if it indeed survives the passage of time and whatever periodic culls the tech giants undertake on the data they hold in personal accounts.

The wider picture is that neither Revenue nor anyone cares about most transfers of small or relatively minor sums to children, unless these are used in some fashion to cumulatively transfer significant wealth to children.

Steven Barrett said:

There was a case a few years ago where the Revenue went after a case where hundreds of thousands was transferred from parents to their son. They claimed it was communion and confirmation money, annual gifts from grandparents (deceased by the time of the case). A big failing in their argument was there was no documentation.

Click to expand...

This case I presume? https://www.taxappeals.ie/_fileupload/Determinations/2024/04tacd2024.pdf

Probably worth saying the parents transferred €330k to their child's bank account over a couple of years but claimed this was accumulated SGEs they'd ""earmarked"" over decades, including some from relatives who had supposedly given the parents the amounts in cash to be earmarked for the child.