Former notary warns: bank transfers to children can be treated as taxable gifts

The message pinged onto Anna’s phone just as she was rinsing coffee cups in the kitchen sink. “Thanks, Mom! 💸 I’ll send you back when I can! Love you.” She looked at the screen, smiled, and wiped her hands on a dish towel. It was just another transfer to her son Jonas—this time a few thousand euros to help with a rental deposit in the city. Nothing official, no contract, no big conversation. Just a mother helping her child. By evening, though, a thought gnawed at her. Over a glass of red wine, a former notary on a radio show said something that jolted her upright: “Even simple transfers to your children can be treated as taxable gifts.”

When Love Becomes a Line Item: The Quiet Risk in Family Transfers

It doesn’t feel like you’re making a “gift” in the legal sense when you help your child pay their first rent, cover a semester abroad, or pitch in for a car. It feels like breathing—an instinct, part of the quiet, invisible fabric of family life. Yet, in the cool language of tax and inheritance law, that instinct can take on a different shape entirely.

Former notaries, the people who have spent decades smoothing out the edges of family agreements, see this all the time. Parents wave off paperwork with a laugh—“We’re family, we don’t need contracts.” Then years later, when an inheritance is settled, or when the tax office sends a polite but firm letter, those casual bank transfers suddenly stand under a harsh fluorescent light.

The basic principle is this: when money moves without an obligation to repay it, the law usually calls it a gift. And gifts are not always just warm gestures; they can also be taxable events, carefully watched by tax authorities who are far less sentimental than we are.

The Former Notary’s Story: A Family, a House, and a Surprise Tax Bill

Imagine sitting in a quiet office with shelves of heavy law books and the faint smell of paper and coffee. Across the desk, the former notary tells you about one of the cases that stuck with him. He changes the names, of course, but the story has played out in dozens of living rooms and offices.

There was an older couple—let’s call them Karin and Peter. Over the years, they helped their two children, Lena and Paul, “whenever it was needed.” A few thousand here for a language course abroad, ten thousand there for a used car, a more substantial amount for the down payment on an apartment. Everything done by quick transfers from their joint account. No receipts, no contracts, and always the same wave of the hand: “We’re family. We trust each other.”

Time passed, as it always does. When Peter died, the notary had to calculate the inheritance. What surprised the family was that tax authorities were also looking at the transfers made over the previous years. Some of those transfers—especially the larger ones—were considered gifts and were added to the broader picture of what the children had already received from their parents.

Suddenly, what had felt like casual, loving support triggered questions about tax thresholds, allowances, and proof: Were these loans that needed to be repaid? Were they gifts? On what date? How much in total? “We never thought of that,” Karin said softly. But the law had.

The Strange Logic of “Just Helping Out”

Part of the problem is our instinctive idea of what “counts” as a gift. A birthday envelope with cash? Sure, that’s a gift. Christmas money? Obviously. But regular transfers for living costs, studies, furniture, or “just to help you out this month”? Most parents and grandparents don’t give that a legal label at all. It’s just what you do.

Yet, from the perspective of tax law, it doesn’t much matter whether money is sent with a heart emoji, wrapped in pretty paper, or quietly moved through an online banking app. What matters is whether the person receiving it is expected to give it back.

Here’s the rough dividing line:

• If there is an obligation to repay, and that obligation is clear and provable, the transfer can be treated as a loan.
• If there is no obligation to repay, and no formal agreement, the transfer is likely treated as a gift.

The former notary would often ask clients: “Could you, realistically and legally, ask your child to give this money back?” If the answer was a slightly embarrassed no, then in most cases, the law would call it what it is: a gift.

That doesn’t mean every gift immediately leads to a tax bill. Most countries have generous allowances for gifts between parents and children, often renewed every several years. But those allowances are not infinite, and they don’t magically label your transfers for you. They just sit in the background, waiting to be exceeded—or to be carefully managed.

Recognizing the Invisible Pattern

One of the dangerous illusions is that each transfer exists in isolation. A thousand here, two thousand there, five thousand for a big milestone. No single amount feels shocking. But over time, the pattern quietly grows.

The former notary would often print out years of bank statements and run a finger slowly down the numbers. “See here,” he’d say. “This is just one family, one child. But add it up.” And the figures could be surprising—even for the parents themselves. When a series of “helping out” transfers over ten or fifteen years begins to rival the value of a small property, the legal and tax landscape changes dramatically.

That’s where conflicts can appear—not just with the tax office, but inside the family. Siblings may feel an imbalance if one child receives more informal support than the other. The law, in many systems, tries to restore that balance when inheritance is calculated. And in that process, the story behind all those transfers must be told, categorized, proven—sometimes painfully.

How Tax Authorities See Your Transfers

Picture a quiet desk at the tax office. No family photos, no graduation pictures, no memories of shared meals. Just forms, numbers, and rules. When the tax authorities look at your bank transfers to a child, they don’t see the late-night phone calls, the panic about a broken-down car, the pride in a diploma. They see dates, amounts, and names. And their question is simple: Does this fit the legal definition of a taxable gift?

They’ll look at:

• Who sent the money and who received it.
• How often transfers were made.
• How large the individual and total amounts were.
• Whether there is any paper trail of a loan agreement or repayment plan.
• What has been declared as a gift for tax purposes, if anything.

From there, they may piece together the story in a way that suits the law, not your intentions. That’s why the former notary warns so strongly: intent alone is not protection. You might feel, in your heart, that this was “just a bit of help,” but if there is no contract, no mention of repayment, and no structure, the law has its own language ready.

The Quiet Power of Documentation

Fortunately, it doesn’t all have to be rigid or cold. Documentation, at its best, is simply a way of telling the story clearly while you can still tell it—while everyone is alive, informed, and on good terms.

Let’s imagine you decide to help your child with a larger sum: maybe a substantial amount toward a house deposit, a business startup, or paying down a student loan. You have three basic options:

• Treat it as a pure gift and, if needed, declare it.
• Treat it as a loan with a clear agreement.
• Create a hybrid arrangement, such as a loan with the possibility of later forgiving part of it as a gift.

Whichever you choose, the key is to make it visible. A short written agreement. A note in the bank transfer description. A mutual understanding, ideally signed and dated. It’s not about mistrust; it’s about preventing confusion later—for your children, your other heirs, and your future self.

Common Situations Where Tax Risks Hide

The former notary would often see the same patterns again and again—familiar because they are rooted in love and worry, but risky because the legal implications are invisible at first glance.

Helping with Housing

Rent deposits, down payments, urgent “bridge” money when a mortgage is delayed—these are classic triggers. A single transfer for a large amount can easily be interpreted as a gift. Even if the plan is that the child will pay it back “when they can,” tax law tends to look for more concrete arrangements.

Regular Support for Living Costs

Monthly transfers to support a child during study, unemployment, or a difficult phase in life often feel like an extension of parental care. Depending on the legal framework in your country, some of this may be considered normal maintenance support and not a taxable gift. But once amounts rise or become irregular top-ups, the border can blur.

“Informal Loans” Without Paper

“We agreed it was a loan,” a parent might say years later. “He was going to pay it back when he finished his degree.” But nothing was written, no dates were set, no interest mentioned, and no repayments ever happened. In such a case, authorities—and sometimes courts—may decide that the so-called loan was never truly intended as such. In practice, it becomes a gift.

Simple Ways to Bring Clarity Without Killing the Warmth

No one wants to turn family support into something that feels like a business transaction. But it is possible to protect your loved ones—and your own peace of mind—without losing the warmth of generosity.

Situation	Risk	Simple Step to Protect Yourself
One‑off large transfer for housing or a car	Could be seen as a taxable gift if above allowances	Decide: gift or loan? If a gift, note the date and amount; if a loan, sign a short loan agreement.
Regular support during study or unemployment	Cumulative sum may exceed gift allowances over time	Keep a simple list of transfers; check national tax-free gift limits every few years.
“Loan” with no written terms	Later reclassified as a gift with tax implications	Write down repayment intent, even if symbolic; add “loan” in transfer reference.
Unequal help to different children	Inheritance disputes and claims of unfair advantage	Document who received what and when; mention in your will how to balance or acknowledge prior support.

These are not heavy legal maneuvers. They are little anchors of clarity in a sea of good intentions.

Talking About Money Without Breaking the Spell

Perhaps the most delicate part of all this is the human layer—the emotional temperature in the room when parents sit down with their children and say, “We should talk about these transfers.” For many families, money is a quiet subject, wrapped in layers of gratitude, guilt, pride, and fear of being a burden.

Yet, the former notary observed something surprising over the years: the families who talked openly, even if clumsily at first, almost always had fewer bitter surprises later. When children understand that a transfer is a loan, they don’t assume it’s an automatic inheritance advance. When siblings are told early on that one child received more help at a certain time, there is space to adjust or at least to acknowledge that fact in a will.

It can be as simple as this: “We’re happy to help you now. For us, this is a gift / loan, and here’s how we’re going to record it, just so that everything is clear later.” That one sentence can prevent misunderstandings that might simmer for decades.

Clarity is an act of care, not mistrust. You are not writing up a contract because you doubt your child. You are doing it because you don’t know what life will bring: illness, dementia, early death, financial hardship for siblings, or changes in the law. A small piece of paper today can spare your loved ones from arguing with each other—or with the tax office—tomorrow.

Letting Generosity Breathe, Safely

Back in her kitchen, with the radio now off and the evening quiet, Anna opened her banking app again. She scrolled through months of transfers to her son—rent support here, a plane ticket there, a bigger sum for a move. On the surface, it was just the story of a mother and her child, woven in digital numbers. But the notary’s warning echoed in her mind.

She didn’t want to stop helping. She didn’t want to turn her love into a ledger. But she also didn’t want her children to face a tax surprise years from now—or worse, to argue with each other over who received what.

So she did something simple. She made a small list. She wrote down the larger transfers of the past few years—just the dates and amounts. She added a note: “Support for studies (gift).” Then she picked up the phone and called Jonas. “Next time we do this,” she said, “let’s write a line or two about whether it’s a loan or a gift. Just to keep things easy later. For both of us.”

On the other end of the line, he paused, then laughed quietly. “Sure, Mom. That actually makes sense.”

The former notary would have nodded approvingly. Because the secret is not to stop giving, not to harden your heart. The secret is to allow your generosity to exist in both worlds at once: in the warm, messy, human world where a parent helps a child—and in the cool, structured world of law and tax, where clarity is its own kind of kindness.

FAQ: Bank Transfers to Children and Taxable Gifts

Are all bank transfers to my children considered taxable gifts?

No, not all transfers are automatically taxed. However, if there is no clear obligation to repay the money, many legal systems treat the transfer as a gift in principle. Whether tax is actually due depends on national rules, tax-free allowances, and the total amount given over specific periods.

How can I show that a transfer was a loan and not a gift?

Use a simple written agreement stating the amount, repayment terms, and any interest (even if minimal). Both parent and child should sign and date it. Adding “loan” in the bank transfer description and recording any repayments strengthens your position if questions arise later.

Do small, regular transfers (like monthly support) count as gifts?

They can, depending on your country’s laws and the size of the amounts. Some support, especially for basic living or education, may be seen as normal maintenance. But if total amounts become significant over time, authorities may still treat them as gifts for tax and inheritance calculations.

What happens if I exceed the tax-free allowance for gifts to my child?

If the total value of your gifts to a child within the relevant timeframe exceeds the allowed tax-free amount, the excess may become subject to gift tax. Rates and thresholds vary by jurisdiction. Careful planning and documentation can help you use allowances efficiently.

Do I need a notary every time I give my child money?

No. For many everyday situations, a notary is not necessary. However, for larger transfers—especially those related to property, business investments, or substantial financial support—it can be wise to seek professional advice to structure the transfer clearly and avoid future disputes or tax problems.

Can I later “forgive” a loan to my child without tax issues?

Forgiving a loan is often treated as making a gift at the moment of forgiveness. That means the same gift tax rules and allowances may apply. It’s important to consider timing, existing allowances, and documentation if you plan to turn a loan into a gift later.

How can I avoid conflicts between my children over unequal financial help?

Document who received what, and when. Discuss your decisions openly where possible. You can also address previous gifts and loans in your will—for example, by balancing amounts or explicitly stating whether past support should be taken into account when dividing your estate.