Attachment to the parents' names
Parents often invest a larger one-off amount for their children — whether to pass on shares of an inheritance to the next generation or to reserve part of their own wealth so that the offspring can get a start on their studies or training later on.
This raises the question: Should we, as parents, invest the money in our own name or transfer the investment amount to the child right away?
As long as the credit goes to the parents, they also have full control. They can make redeployments and even recover part of them if necessary to cover their own financial needs. The parents determine when the transmission to the child takes place. If they notice that their daughter or son is not yet able to handle larger amounts responsibly at the age of 18, they can withhold the investment capital or pay it out in smaller installments over several years.
However, this has an important disadvantage: The income from the investment is attributed in full to the parents. Is the annual Savings allowance (1,000 euros for single people, 2,000 euros for married people) is used up, withholding tax is due.
If you want
Attachment to the child's name
If the money is immediately invested in the child's name, he can use his own savings lump sum for the income, so that this variant is cheaper for tax purposes.
However, the following applies: A gift is a gift. Parents are not allowed to recover any of the money; it is only possible to reallocate to other investment products. And as soon as the child is of legal age, they can freely dispose of their funds.
To prevent the child from spending all the investment capital immediately after the age of 18, you can stretch the payout with a simple trick. You leave a smaller part of the money in the child's investment account or securities account so that the child can dispose of this share directly. Shortly before the age of majority, you also shift the rest to the child's name in Fixed deposits or Savings bonds around, for example, half with a term of two and four years — this allows the payout to be spread over a longer period of time.
If you want
