How to transfer money to your child for financial help to support his income? In these cases, it is preferable to take the necessary precautions to prevent the controls of the Revenue from suspecting illegal actions. In this short guide we will see what solutions are offered to the reader for the transfer of money to the child.
Although it is often an act of great generosity, it is not said that the transfer of money from father to son is liked by the Revenue. It is true that the reasons for the transfer of money can be manifold and therefore it is good to know how to avoid incurring penalties or fines. Let’s see together how to transfer money to the child for financial help.
The donation
When we speak of donation we refer to the act according to which a donor (the parent) intentionally enriches a donor (the child). The donation, pursuant to art. 769 of the civil code is a contract that requires its improvement through a declaration. Donation usually involves the gratuitousness of the action of giving without the donor obtaining a fee. In simpler terms, the donation does not provide for the return of the same by the donor, in this case the parent.
When the parent makes a donation, however, he must pay particular attention to avoid problems with the tax authorities. What do you mean? As regards the tax authorities, the latter could encounter inconsistencies between the income declared by the child and bank deposits. This discrepancy becomes evident above all if it is a matter of donations of not modest value that the parent makes to the child’s address. Through the Redditometer the Tax Office could find out this inconsistency which will ask the taxpayers reason. In these cases, it is good to use traceable means of money transfer to avoid tax checks.
An example of a traceable transfer could lie in the use of the transfer. Attentive to the insertion of the reason that must be specified very accurately. To get an idea of what to write in the reason for the bank transfer to the child, you can consult the details here. Please note that the signing of a notarial deed is required for non-modest donations.
How to transfer money to your child
If the child needs a loan, then the nature of the loan must first be clarified. What do you mean?
First of all, it must be determined whether it is a non-interest bearing loan or for consideration. There is no interest for the former, so the child only has to return the loan received to the parent. In the second case, however, interest is applied to the refund. In the event of a loan for consideration, the parent will have to pay taxes on the amount of interest received. It is a real form of income that must be declared to the tax authorities.
Whatever the choice you intend to make, it is good to put a private writing between the two contractors. In addition, the transfer of money also in this case is preferable to take place by traceable means: bank check, wire transfer or money order could be valid alternatives to transfer money in a traceable manner.
If you keep these simple rules in mind, you will avoid any tax checks or onerous penalties.
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