Savings/investments for childrens future

I never thought this through in such detail. A trust, and paying management fees all sounds rather complicated.

I do not believe the tax man is getting out a microscope to see if Mary breached her annual gift limits to little Jonny over a few K here and there, so does that really need consideration?

I think it makes sense for parents to retain access to cash funds - we do our child no favours getting into trouble and face debt and interest that could have been mitigated.

My better half is obsessed with putting anything the kids get into the credit union, and letting it rot there, killed by inflation. I will win that argument eventually.

My preferred path is a simple account, with abilty to put the money into an index. When the child is 13 or 14 we can start to explore what investing in the stock market is - and it can become a hobby/learning exercise.
 
I think the point is that if the money is going into an account in your name, which you control, Mary is not breaching her annual gift limits to little Jonny because she's not making gifts to little Jonny at all; she's making gifts to you (unless you've set up a trust arrangement with you as the trustee and little Jonny as the beneficiary, but let's assume you don't do that). She may be exceeding her annual small gift limits to you, obviously, but that's a separate issue.

The intention/expectation is that, later on, you will gift (the accumulated value of) this money to little Jonny — all at once, or in dribs and drabs, as you think best. Only then do we have to consider little Jonny's liability to gift tax, and whether that gift exceeds the annual limit. But, even if it does exceed the annual limit, it's a gift from you, and assuming you are little Jonny's parent he has to get more than €400,000 in accumulated gifts and inheritances from you before he has any gift tax liability.
 
presidenttttt said:
I do not believe the tax man is getting out a microscope to see if Mary breached her annual gift limits to little Jonny over a few K here and there, so does that really need consideration?
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It's not unknown for Revenue to take an interest in such matters. There have been a few cases in recent years where they have done this. E.g.:
www.informeddecisions.ie

Saving & Gifting to Kids in Ireland? Doing it Wrong Costs Thousands in Tax

www.informeddecisions.ie www.informeddecisions.ie
presidenttttt said:
I think it makes sense for parents to retain access to cash funds - we do our child no favours getting into trouble and face debt and interest that could have been mitigated.
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In which case it's not actually a gift.
 
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@GSheehy its Bare trust account in children’s name for small gift allowance. This is re the 1.5% charge, can’t seem to reply to your response directly. Thanks
 
ClubMan said:
In which case it's not actually a gift.
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Exactly.


ClubMan said:
Isn't 5 and under a bit young to learn about recreational drugs and sex workers?
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Very much so. Which is why I very rarely drink alcohol except when I'm far away from the smaller individual. And treat my better half with the respect of which they are thoroughly deserving.

If on a regular basis you're drinking alcohol, smoking cigarettes or weed, or using any other sort of drug legal or otherwise either around or near your child you're teaching them about recreational drugs. And they very much absorb that knowledge and will express it later after processing it in their own unique way. My offspring likes to "make coffee" for example, and it would be astounding if they don't develop their own caffeine addiction later in life- they didn't lick that off a stone...

Same applies to any other behaviour you can think of, including financial behaviour.

presidenttttt said:
I think it makes sense for parents to retain access to cash funds - we do our child no favours getting into trouble and face debt and interest that could have been mitigated.
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I think it makes much more sense to get your financial ducks in a row ab initio rather than pretending that your emergency fund is junior's college fund because, and let's be very clear here, you're saying straight up that it's an emergency fund which you intend to use for their college fund if not required for other purposes.... Zurich's child savings account starts at €100 a month- you can always have a separate emergency fund and pay less into the child savings account instead of maxing out the SGT and keep your own savings separate.
 
BIG-notorious said:
Um, yes? You either trust your kid or you don't. And worst case scenario and they spend it on something I think is stupid, then they'll learn a valuable lesson about opportunity cost. Because the money tree is only going to bear fruit once .
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Or you trust them with 6k and there is an opportunity for them to learn gradually? But again the primary reason is staying within the gift allowance.
 
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