Car purchase: how to donate money to your child

Car purchase: how to donate money to your child

The purchase of a car is part of the goods considered to be “luxury”, therefore, it is subject to the profit meter. This means that the Inland Revenue carries out a synthetic assessment on the buyer, and verifies whether he submits the tax return that can justify this purchase.

Therefore, to avoid investigations that can lead to heavy penalties, the parent who intends to contribute to the purchase of the car for the child has two options:

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a) make a bank transfer to your child’s current account, indicating in the description that it is a donation for the purchase of a car. Or, by giving the child a non-transferable bank or postal check;

b) make a bank or postal transfer directly to the car seller, or, hand him a non-transferable check.

It is not recommended to hand over cash to children, because the Revenue Agency, as reported above, checks the buyer and if he has no income or insufficient income, asks for explanations on the expenditure made.

Furthermore, if the child fails to justify the parent’s donation, the Agency triggers the tax assessment with onerous penalties.

Related Post : All phases of the 2021 change of ownership to donate a car to the child

Do you have to make the deed of donation?

The two methods indicated above do not require the formalization of the donation before a notary. In fact, it is an indirect donation, which as clarified also by the United Sections of the Cassation, in these cases it is not necessary to stipulate a public deed.

In fact, the deed of donation is useful when transferring large sums of money. In this case it is necessary to contact the notary to formalize the donation. In addition, donation taxes are due when the amount donated exceeds one million euros. Once this sum has been exceeded, 4% is applied to the part exceeding one million euros.

Read Also : Why you should donate a car

Of the two options illustrated, the payment directly to the child’s current account may be more practical and convenient. We also remind you that if you have more children, it is also important to consider the legitimacy quotas.

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