Money Family. Grandparents: How to help your grandchildren?

When you want to help your grandchildren financially, the most obvious solution is to write them a check or give them an “envelope.”

The donation qualifies as a customary gift and is not subject to any tax. In the eyes of the tax authorities, it still must be so.

It is therefore advisable to donate an amount that matches your financial situation and, if possible, to a specific event (birthday, Christmas, emergency, etc.).

Grant tax exemption

As part of a donation, a larger amount can be given. It must be reported to the tax authorities by the donee, but the latter authorizes a reduction of 31,865 euros; in other words, up to this amount, you can make the donation over a period of fifteen years without running the risk of taxation of the donation.

This contribution can be combined with the family contribution, also reduced to €31,865. But be careful: you must be under 80 years old and your grandchild must be at least 18 years old.

Another tool: intergenerational donation of shares, allowing your grandchildren to benefit from your estate. This is only possible with the consent of the parents, as it involves taking the property from their inherited share. Reduction is the same, but requires a notarial deed.

Give Growth

Many grandparents choose to open and complete a Livret A book for their grandchildren. 3% reward, still fun.

But we can also think of the Housing Savings Scheme (PEL), whose interest rate was raised to 2.5% in January.^yes January 2024. The advantage is that the interest rate set when opening the account is guaranteed throughout the plan period and allows you to get a home savings loan at a favorable interest rate.

Disadvantages: Unlike Livret A, the interest on PEL is taxable.

Since 1^yes You will also be able to open a Future Climate Savings Plan in the name of your grandchildren in July 2024. This is reserved for people under 21 years of age and the amounts paid will be frozen until the holder reaches legal age.

Since these funds are intended for investments in ecological transition, the rate of return is not set by the state but depends on the results of the investment.

Choosing Life Insurance

The French preferred investment is a safe way to pass on your legacy while maintaining control over your savings. All you have to do is designate your grandchildren as beneficiaries.

Its privileged tax framework allows tax-free capital transfers of up to €152,500 per beneficiary before the age of 70.

In addition, the beneficiary can also reduce the premium by 30,500 euros in a lump sum. But you can also open a life insurance policy in the name of your child.

In this case, it is best to do this at least eight years before reaching the age of majority, so that from the age of 18 he can benefit from tax relief on his annual income of €4,600.