Periodic payments from a gifted Dutch annuity dating from before 1992 may go to a minor child. The parent with the highest personal earned income reports the income. The provider withholds wage tax.
Why this matters
This rule applies only to a legacy policy covered by transitional tax rules. The original contract, endorsements and beneficiary records determine whether it applies. Cash may stay with the child while a parent reports box 1 income. Transferring the annuity right can also create a gift-tax file. In 2026, a grandparent may give a grandchild €2,769 tax-free. If a 2026 gift-tax return is required, it is due by 1 March 2027.
Example
A grandparent gives a minor grandchild rights to payments from a qualifying pre-1992 annuity. The provider pays the child and withholds wage tax. The parent with the highest personal earned income reports the gross payment in box 1. That parent credits the withholding in the tax return. If the money stays in the child’s account, the parent may need other cash for the final tax bill. The annuity right needs separate review and valuation.
XTROVERSO tips
- Check the original policy. Find the contract, policy date, endorsements, transfer documents and beneficiary changes. Do not rely on the provider’s current product name.
- Confirm the tax classification. Check whether the contract is a Pre-Brede Herwaarderingslijfrente from before 1992. This published position does not cover every annuity held for a child.
- Identify the correct parent. Calculate which parent has the highest personal earned income under this tax rule. Payroll income alone may identify the wrong parent.
- Reconcile the annual records. Match the gross payment, withheld wage tax, provider statement, bank movements and box 1 return. Keep a short note explaining why the records show different names.
- Keep a separate gift-tax file. Record the donor, recipient, transfer date, other gifts that year and the annuity right’s value. The annual cash payment may differ from the value transferred.
- Plan the household cash. Check whether wage-tax withholding covers the final income-tax bill. An owner should keep any shortfall separate from company payroll, dividends and supplier payments.
Need help with an old annuity, the annual return and the related gift? We can organise the records and assess the cash impact
The data, sourcing, and analysis behind this article were conducted by Linda Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan before publication.
References
- Belastingdienst Kennisgroepen — Announcement of the position on a gifted Pre-Brede Herwaarderingslijfrente
- Belastingdienst Kennisgroepen — KG:070:2026:6 on payments to a minor child or grandchild
- Belastingdienst — Verzamelbesluit lijfrenten en andere periodieke uitkeringen
- Belastingdienst — Tax-free gifts to grandchildren
- Belastingdienst — Gift-tax rates
- Belastingdienst — Gift-tax return deadline
- Belastingdienst — When a gift-tax return is required
- Belastingdienst — Gifting a life insurance policy or payment
