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If you’re a parent, grandparent or a close relative, you’ve probably considered saving money to help a child you love. Whether it’s for their education, first car, future home, or just to give them a head start in life, it’s a generous gesture. But how do you do it smartly, without creating a big tax headache later?
Let’s talk about Aviva’s Children’s Investment Trust — a smart way to gift money to children under 18 that could be tax-efficient.
What Is Aviva’s Children’s Investment Trust?
It’s a simple idea: you invest a lump sum on behalf of a child using an Investment Bond held within a Bare Trust. Think of it like a long-term savings pot that grows over time and is legally set aside for the child’s future.
Why Would You Use This Instead of Just Putting Money in a Savings Account?
Here’s why many parents and grandparents are choosing this option:
It Can Grow Over Time
The investment bond gives access to a wide range of funds, allowing your money to grow more than it would in a regular deposit account.
It’s Tax-Efficient
The biggest benefit is the Capital Acquisitions Tax (CAT). Each child can receive money tax-free up to a specific limit (see the thresholds below). And here’s the significant part: any investment growth doesn’t count toward that limit. So if your gift grows from €40,000 to €75,000 over time, the child still won’t owe CAT on the extra €35,000.
Example:
Jim and Mary, proud grandparents, gifted €40,000 to their granddaughter Emma using an Investment Trust Fund.
When Emma turned 18, her investment had grown to €83,000, and no Capital Acquisitions Tax (CAT) was due on the €43,000 growth.
That’s a smart way to save thousands in tax and ensure more money goes straight to Emma’s future.
Give Your Child a Head Start — Explore Your Investment Options!
Choose How Your Money Grows
With Aviva’s Children’s Investment Trust, you’re not locked into a one-size-fits-all approach. You can choose from various investment options tailored to different risk levels, asset types, and fund managers. Whether you prefer a cautious strategy or aim for higher growth over the long term, there’s flexibility to match your goals, all while building a future for your child or grandchild.
It’s Managed by You (the Trustee)
As a trustee, you stay in control. You choose where the money is invested, track its performance online anytime, and make changes if needed. The funds are managed on behalf of the child, but you stay in charge until they turn 18, giving you peace of mind that the gift is growing exactly how you intended.
It’s Locked in for Their Benefit
Once the trust is set up, the money legally belongs to the child, but they can’t access it until they turn 18. This means the funds are protected and can only be used for their benefit when they’re older, helping ensure the money supports important milestones like education, a first car, or a deposit for their future home.
Can I Choose Who Gets the Money?
Yes. When you set up the trust, you name the beneficiary (the child). That money is then legally theirs once they turn 18.
Is This Only for Parents?
Not at all. Grandparents, aunts, uncles —anyone who wants to give a meaningful, lasting gift can use this option. It’s a popular choice for grandparents who wish to pass on wealth without triggering taxes.
Important Considerations Before You Set Up a Children’s Investment Trust
A few things to keep in mind:
- Once funds are placed in a Bare Trust, the child becomes the legal owner. The gift is irrevocable and cannot be reversed.
- The child must be under 18 when the trust is started.
- Exit tax and a small 1% life assurance levy apply, but Aviva calculates and pays this for you.
- You must register the trust with Revenue as part of anti-money laundering rules.
Is It Complicated to Set Up?
Not really. With help from one of our financial advisors, you complete the forms, choose the funds, and register the trust. After that, you can manage everything online. It’s a one-time setup that can benefit the child for years to come.
- You want to keep ownership or access to the money after it’s invested
- You may need the funds for your own personal use in the future.
- You’re not ready to make a permanent, non-reversible financial gift.
- The child (beneficiary) is already 18 or older.
- You want flexibility to change the beneficiary or revoke the gift later.
Thinking Long-Term? Let’s Build Your Children’s Future
Get a Savings & Investments Quote
Thinking about investing in your child or grandchild’s future? Our financial advisors are here to help you understand your options and find the best solution for your goals. Whether you’re ready to set up a Children’s Investment Trust or want to explore the possibilities, we’ll guide you every step of the way — from choosing the right investment funds to understanding the tax benefits.
Prefer to do some research first? You can also read Aviva’s Children’s Investment Trust guide here for a detailed look at how the trust works, who it’s for, and how it can help you make a long-lasting, tax-efficient gift.
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All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
Aviva Life & Pensions Ireland Dac, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland.
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