A lot of parents put Child Benefit aside rather than spend it, and the conversation that follows is always about where: a credit union, the post office, a fund, an app. All of that is a question for a financial adviser, and this guide does not answer it.
It answers the one that comes before it, and that almost nobody is told. Child Benefit is paid to you, not to your child. Money you save out of it is your money until you give it away, and when you do give it away, Revenue treats that as a gift. Gifts have rules, and the rules treat two perfectly ordinary approaches very differently.
The short version
- Who Child Benefit is paid to
- You. It is your money unless you put it in your child's name
- What the handover is
- A gift, in Revenue's terms, and gifts are within Capital Acquisitions Tax
- Small gift exemption
- €3,000 a calendar year from any one person, exempt from CAT
- Two parents
- Each parent has their own exemption, so each can give the same child that amount in the same year
- Group A lifetime threshold
- €400,000 from a parent to a child, since 2 October 2024
- A full year of Child Benefit
- €1,680, which sits comfortably inside one parent's yearly exemption
- The part that surprises people
- Gifts inside the small gift exemption are not counted in aggregation at all
Whose money is it
Child Benefit is a social welfare payment made to a parent or the person the child lives with. It is decided and paid by the Department of Social Protection, and it lands in your account. If you then move it into a savings account in your own name, it is still yours: it is your savings, with your name on them, and any interest is yours for tax purposes too.
That is not a criticism of doing it that way. Holding the money in your own name keeps it available if the family needs it, which is exactly why many parents choose it. It just means the day you hand it over is a real event with a tax character, rather than a formality.
The Child Benefit guide covers the payment itself, who qualifies and how it starts.
The yearly route: what the small gift exemption does
Revenue's small gift exemption is the thing that makes this simple, and it is underused because people only look at it when a large sum is involved.
Gifts you receive up to €3,000 from any one person in a calendar year are exempt from Capital Acquisitions Tax. It applies per giver, so a child can receive that amount from each of several people in the same year, and each parent has their own. Revenue also states that gifts within this exemption are not taken into account in computing tax and are not included for aggregation purposes, and that no CAT return is needed to claim it.
That last sentence is the whole point. A gift inside the exemption does not merely avoid a bill, it leaves no trace against the lifetime threshold. It is not deducted from anything.
A full year of Child Benefit at the current rate is €1,680 for one child, which is well inside a single parent's yearly exemption. So a parent who moves the year's Child Benefit into the child's name each year, rather than accumulating it in their own, is using a route that costs nothing and uses nothing up.
The lump sum at eighteen is a different thing
The other common approach is to save quietly for eighteen years in your own name and hand over the total. It is generous, it is ordinary, and it is taxed differently.
That handover is a single gift in a single calendar year. The first €3,000 of it is covered by the small gift exemption for that year. The rest is a gift within CAT, measured against the Group A lifetime threshold, which is the total a child can receive from their parents before tax applies. Since 2 October 2024 that threshold is €400,000.
For Child Benefit-sized savings, that will not produce a tax bill for most families. What it does is use up part of a threshold that is not only for this. The same €400,000 has to cover everything a child ever receives from their parents, including an inheritance later. Spending some of it now, on money that could have passed exempt if it had been given yearly, is a choice worth making knowingly rather than by default.
The exemption is annual, and it does not roll over. The small gift exemption is per calendar year. A year in which you do not use it is not banked and cannot be caught up later. That is the mechanical reason the two routes diverge: eighteen yearly exemptions and one yearly exemption are not the same allowance, even though the money is identical.
What this guide is not telling you
We are not a financial adviser and this is not advice about what to do with the money. Where to hold it, whether to hold it at all, what risk to take and what any product might return are questions for someone qualified and regulated to answer, and the answer depends on things this page knows nothing about.
There are also consequences to putting savings in a child's name that go beyond tax, including who can access the money and when. Those are worth asking about before choosing a route, and again they are not ours to answer.
What we can do is make sure the tax question is on the table at all, because it usually is not. If you take one thing from this page, take the question: am I giving this yearly, or am I giving it once?
Who decides what
The Department of Social Protection decides and pays Child Benefit. Revenue sets and applies Capital Acquisitions Tax, the small gift exemption and the group thresholds, and Revenue is the only authority on how a particular gift is treated. A regulated financial adviser is the person to ask about products, risk and returns.
We decide none of it. This guide sets out what Revenue publishes so that the tax side is a decision rather than an accident.
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Official sources
- Revenue: Small Gift Exemption (the €3,000 a calendar year from any one person, that it applies separately to each disponer, that such gifts are not taken into account in computing tax and not included for aggregation, and that no CAT return is needed)
- Revenue: CAT group thresholds (the Group A lifetime threshold of €400,000)
- Revenue: Guide to the CAT treatment of receipts by children from their parents (that the Group A threshold applies from 2 October 2024, and that each parent can use the small gift exemption)
- Citizens Information: Capital Acquisitions Tax (background on how the groups and thresholds work. It also publishes a table of historical thresholds, so read the current figure from Revenue rather than from that table)
Facts checked against the official pages on 2 September 2026. This is general information, not financial, tax or legal advice, and it is not a recommendation about where to save or invest. It does not decide how Revenue will treat any particular gift. Revenue sets and applies Capital Acquisitions Tax; the Department of Social Protection decides Child Benefit. Thresholds and exemptions are set by government and change in the Budget; always confirm on the official pages linked above, and take advice from a regulated adviser before acting.