The ‘Balance sheet of Mum and Dad’

Most are familiar with the phrase ‘Bank of Mum and Dad’ (BoMaD), and the ever-growing importance of this ‘bank’ in helping children onto the property ladder. With demand for property continuing to outpace supply, BoMaD is likely to remain a mainstay of property financing rather than a transient phenomenon.

Many property experts believe that BoMaD financing adds to property inflation. Yet market forces have themselves created the need for this parental assistance.

Household net wealth in Ireland reached a record high in Q4 2025 (the total value of everything a household owns, minus the total amount of debt it owes).¹ Net wealth stood at €1,382.6 billion, driven largely by a rise in housing wealth (the market value of residential property, minus any outstanding mortgage debt).

With deposit rates on offer from banks remaining modest, it’s understandable that parents are helping their children to purchase a home. At RBC Brewin Dolphin, we see many of our clients doing just that through BoMaD, and we expect this to continue.

But there is a broader approach. The ‘Balance Sheet of Mum and Dad’ introduces children to wealth planning structures that allow them to share in future growth, often tax-efficiently, and in many cases using ‘family loans’ rather than outright gifts. Our Wealth Planning team encourages clients to think in terms of the ‘Balance Sheet’ rather than the narrower BoMaD, which tends to focus only on house deposits.

Below are some ideas families are already using, which others could consider as part of next-generation wealth planning.

Strategic pensions for 18–23-year-olds

• Who this suits: Parents who can gift or lend a larger sum and want to give a child’s retirement saving the longest possible runway.

We focus here on the 18-23 age group, though the same approach can apply to someone older. The minimum age is 18.

A PRSA (Personal Retirement Savings Account) is a pension structure in Ireland. Anyone over the age of 18 years can set one up, and you don’t need to be employed to contribute.

If a parent were to either gift or loan money to child over 18, and that child subsequently put the money into a PRSA, they have taken a significant step towards future-proofing the child’s retirement needs.

The appeal lies in three things:

• Returns inside the PRSA compound free of tax.
• The benefits of compounding are realised over time.
• The child will generally have no access to the PRSA until age 60, although it may be possible in certain circumstances to retire a PRSA from age 50.

For example, €100,000 placed into a PRSA at age 18, compounding tax-free until age 60, should create a significant retirement asset, outside of any other retirement benefits the child may build through future employment.

Note: We are setting aside any tax-relief considerations on the contribution and are not suggesting these are available. Put simply, this is a tax-free compounding investment structure that can be used to create future wealth for children.

Family partnerships

• Who this suits: Families whose assets comfortably exceed their own future needs and who want future growth to sit with the next generation.

A strategic question that parents might consider is ‘Have we accumulated enough capital in our names?’.

Our clients’ future needs are paramount and having sufficient assets to maintain their lifestyle is critical to robust wealth planning. But if those assets are more than capable of addressing all future needs, it may be worth allowing wealth to accumulate in the child’s name instead.

This is where family partnerships come into their own. The structure lets parents retain control of the family capital and make the appropriate decisions, while the future growth is owned by the children.

This has two effects:

• It limits the potential capital acquisitions tax (CAT) payable by the children, as any future growth in capital is mainly owned by the children, not the parents.
• It brings flexibility to wealth planning for the next generation, allowing them to participate and use the wealth on the parents’ ‘balance sheet’ rather than waiting for an inheritance and potentially facing a much larger CAT bill.

Approved retirement funds

• Who this suits: Parents with an approved retirement fund (ARF) and other assets sufficient to meet a surviving spouse’s needs, who would prefer capital to reach their children sooner.

An ARF is a post-retirement structure held by many individuals after they have taken their pension lump sum. A clear benefit is that returns within the structure can grow free of tax. From the year an individual turns 61, depending on the overall value of their ARFs, either 4% or 6% of the value is deemed to be taxable income – rising to 5% or 6% from age 71. As a result, this amount is often withdrawn from the ARF each year.

When considering the overall balance sheets of parents, there may be an opportunity to direct the ARF to children rather than to a surviving spouse.

The reasoning is straightforward. If there are other assets – either to be inherited by a surviving spouse or owned jointly – these may be more than sufficient to meet ongoing needs, making the ARF superfluous to the spouse’s requirements. Yet under current legislation, the surviving spouse will continue to be taxed on the ARF each year regardless.

Changing a will to allow an ARF to pass to children instead lets capital be received earlier. Otherwise, the children must wait until the death of the second parent.

When an ARF is inherited by a child over the age of 21, the inheritance is subject to a flat 30% income tax charge. It is not subject to CAT, and the amount does not affect the child’s Group A gift or inheritance threshold. The child receives a net 70% of the value of the ARF with no further liability, potentially at a life stage where liquidity is very welcome.

A balance sheet, not just a bank

The Bank of Mum and Dad will keep helping children onto the ladder. The Balance Sheet of Mum and Dad goes further, sharing growth, managing tax and keeping you in control.

If you’d like to talk through what might work for your family, contact your wealth manager, we’d be happy to help.

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¹Centralbank.ie, Household Wealth, June 2026

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