Financial Gifts to Kids - not for squandering

[FonaFona]

I want to make use of the small gift exemption: “You may receive a gift up to the value of €3,000 from any person in any calendar year without having to pay Capital Acquisitions Tax (CAT).”

Context:
- kids are 7 years old.

- Looking for ways to give it to kids but ensure they don’t squander it. Aim of this is to ensure they have a lump sum later in life to give them a start on a mortgage deposit, or other big ticket items in adult years.

Question:
Thinking of ways to make this happen other than influencing them to make the right decisions in life - i.e don’t blow it on a holiday and a sports car.

I found this article but it doesn’t deal with how to ensure the kids don’t blow it. I had hoped it would talk into, maybe trust funds that can’t be accessed until x date, or something along those lines. But maybe caveats like that then invalidates the “gift” definition.

How can I save for my children without getting on Revenue’s wrong side?

Q&A: Confusion on practicalities of opening bank accounts for kids

www.irishtimes.com

All thoughts welcome.

 

[Pinoy adventure]

Maybe sumthing like the 6 year instalment plan with an post.

 

[Zenith63]

Couple of recent threads worth a look, but there are plenty more -

Investing for your kids, your name or theirs?

My kids have various amounts on deposit with BOI in their own name, its monies gifted within the annual threshold from grandparents and childrens allowance lodged. obviously its earning nothing there and we had though about putting it in a fund with zurich or someone but if we put it in their...

www.askaboutmoney.com

Investment for child's future

Hi I'm dad to a 1 year old and we have been saving his allowance and adding to it ourselves since he was born. This is something we would like to do to help him with his future, whether that's a down payment on a house or education. Leaving it in a bank is just not going to give the returns we...

www.askaboutmoney.com

I’m in a similar position but would be less concerned about kids blowing the money as I would be by it sending them off down a bad path. From what I read before your options seem to be a bare trust (which expire too early at 18 in my view), more complex trusts (discretionary etc) which can last longer but have tax implications, put it into say shares which are more difficult for an impulsive child to sell and you can probably build a good life lesson around (I’ve seen this work well) or keep the money in your own name and gift it when you’re ready and take the CAT hit.

Give the last option serious thought unless you’re talking serious money. The likes of providing for education etc is all exempt from CAT anyway. And once the kids hit an age where you think they can handle it, both you and your spouse can give each child, their spouses and their kids €3k/year, which adds up very quickly. Is it worth the gamble of them getting the money sooner and how it might impact them, just to save a few quid on tax?