Australian Tax Tips: Are Gifts Taxable?

EDITOR: For some reason the most popular questions asked in the comments of my Australian Personal Tax FAQ are in relation to gifts and whether or not they are taxable. As I am not knowledgeable about this area I asked my accountant friend Andrew from Aussie Tax Time to provide some general guidance on the subject.

GUEST ARTICLE: Hi my name is Andrew, please note that my guest article is intended to give some guidance to the question Are Gifts Taxable? It isn’t personal financial advice and I don’t get into the full legal arguments.

In Australia, as an individual, we are generally taxed by the Australian Taxation Office on income that we receive from providing services i.e. working.

We can also be taxed for our investments such as interest earned in a bank account or Dividends received because we own some shares, these are classed as income. We may also be subject to Capital Gains Tax (CGT). This is a tax on increases in investment Assets such as shares or property.

As a general rule if the Gift is not covered in the above situation then it will not be subject to income tax.

The ATO NEXUS

So what is the test? So there is a great word called NEXUS that the ATO like to use for many things. It means is there a direct link between the gift and the employment (i.e. working) or in the case of the property the gift and the income stream of rent.

In terms of the employment If you get a gift of a car from your employer then the ATO will probably consider there is a sufficient NEXUS between you receiving the gift and your Job.

If your Dad gives you a car for your Birthday then you can be pretty sure it will not be taxable.

You also need to be careful of making a gift payment continuously where it has the perception of Income.

For example you rent your mothers investment house and pay below market rent and then gift her money every month this may be construed as a payment in lieu of rent and hence takes on the feel of Income and will be taxed accordingly.

ATO Cases Related to Gifts

Have a look at these cases to get an idea of the legal background:

Are Gifts Taxable – Case Studies

Here are some examples: all of them assume there is no NEXUS between the gift and employment

  • We inherited some money and want to give it to our Son. – No Gift Tax on the gift to the Son
  • My Mum gave her sister $139k is their gift tax – No Gift Tax to sister
  • Parents giving money from Overseas to buy House – No Gift Tax although there may be rules about bringing in large sums of money to the country
  • I won some money and want to give my mate enough to buy a house – Good friend, what is your email….Just Joking – No Gift Tax
  • I wish to sell my home and buy a house for each son – No gift Tax and generally if the house was your main residence you probably will not be liable for CGT.
  • My daughter has been renting from me for and now I want to sell it to them and give her a portion of the rent she has been paying – Good question and a little complex. OK she has been paying you rent, this is taxable to you. You want to sell the house to them; if you bought this after September 1985 generally you will have to pay CGT. Giving her back some money as a gift – No Gift Tax.

This guest technology review has been written by my friend Andrew from Aussie Tax Time. A CPA Accountant and an associate member of the institute of Company Secretaries (Sydney), with over 18 years experience in a commercial corporate environment, 15 of which were in CFO and/or Board Secretary Positions. Andrew also has more than 20 years experience in public practice accounting services.

Aussie Tax Time is a new CPA practice that provides advice for small businesses and people starting new businesses in relation to company structures, tax obligations and business planning. For more information contact them by email, Facebook or Twitter.

If you’re a blogger or an expert about a topic I cover on this blog I encourage you to contact me and I’ll consider publishing your guest article here including generous attribution and back links back to your website as thanks for your contribution


127 comments on “Australian Tax Tips: Are Gifts Taxable?

  1. Hi,
    Firstly, thanks for a great article – very helpfull indeed.

    Just a quick question – I live in Australia, but my brother who lives in Europe is selling his business & wants to help out his other family members by donating some money to us. He is planning to send approx AUD$ 50k to me in Australia which I would love to use to pay something off my mortgage, but I just want to double check that the money is not taxable here before he sends it?

    From what you said in your article, I assume its not taxable here, but any advice would be really helpful.

    Thanks

    Dave

  2. I wish to gift my son $200,000 to help him buy a house. It is just a gift. I wish to show him from some authentic source that there is no gift duty payable in Australia.

  3. Is there a limit on how much you can give at any one time?

    I read that if you give more than 30k over 5 years you may get lower pension.
    if i dont receive a pension do i need to worry about this? Does centerlink keep a record of money you have given and when it’s time to get your pension they penalize you for it?

    eg. if i am 25 and give 50k away. when i reach 65 will my pension be less because i have given 50k away 40 years ago?

  4. Andrew Jeffers on said:

    Dear All,

    Thanks for the last lot of Questions.

    1. Dave S- I cannot give you specific advise as I need to know your full situation. The article deals with general stuff not specifically linked to anyone. Look at some of the tax cases for futher clarification or if you are in Sydney you can come and see me.

    2. Dave – Thanks for the question. An Authentic source would be the Australian TaxOffice www.ato.gov.au . You can also buy a book or look in a library for a book called the Australian Master Tax Guide, there is a section in their in relation to Gifts.

    3. Chung – You are talking about several issues here. I cannot comment on your pension. The article and questions relate around the fact as to whether you are giving a gift or receivng a gift and whether or not it attracts income tax. I think there are rules around giving away money that may affect centrelink benefits. You would be best contacting the centrelink offices for further clarification?

    Kind Reagrds

    Andrew Jeffers
    CEO
    Aussie Tax Time
    aj@aussietaxtime.com

  5. my mother wants to give us 100k ..if we use this to buy an investment property do we pay gift tax..cheers pete

  6. I want to buy into my dads property,basically I want to buy in to pay off his mortgage. I want to buy halk of a 80 acre property, but subdivding it is proving difficult. is it possible to buy the property of him whole, then give him a gift of half the property?

    its a hard one i know,

    cheers
    dan

  7. Mike on said:

    Hi i was hoping to build a house on the back property of my partners parents house. They are pensioners and i was told that this would be considered a gift and any gift worth more then 10000 dollars gets a gift tax, but more importantly they would like to know how it would affect there pension as its there only income, does the property affect there assets in the eyes of centrelink?

  8. Linda on said:

    I have the feeling that this article was written by an American. Americans tend to use a certain verb in a place, and Australian English uses another verb.

    VERB: bring

  9. Pushpendra Singh on said:

    hi,

    i am belongs to India and i want to send money as gift to my brother, i want to know from you whether it is taxable their in Australia.

    please advice me.

    regards/ Pushpendra

  10. Hi
    I heard that you can get pension only if you have one property. If you transfer as gift the second invesment property to your children then what is all involved before you qualify for pension

    Please advise

  11. Hi there, if i recieve one off 150000 gift from friend to help pay my mortgage would i be required to pay tax on that 150000, because it is going on my house?.
    regards

  12. Thanks a lot, great list of case study answers – that’s very practical as the language is simple.

    My wife regularly gets gifts sent to her from her country, as we both live in Australia now, and so far we haven’t paid any tax, from your list it seems we’re not commiting any crime. Good to know.

  13. Tia's mum on said:

    G’day, if this gives me the answere it’s a gr8 site so tvm! My ? is:
    Mum is baout to enter an aged care facility. How do I reduce her assets for the accommodation bond?

    Again, thank you sincerely.

  14. Lindy Jordan on said:

    Hi-I live in Australia and recently inherited 25k from my Grandfather’s estate. I want to give it all to my Mum. Am I taxed on my inheritance and will myself or my mother pay any gift tax?

    Regards, Lindy

  15. Hi there,

    My mum has given me $1000 as a gift for my OE. I want to put it into my bank account but am weary that the ATO may query where a cash deposit of that size came from when it comes to EOFY. Is it as simple as telling them it was a gift or do I need to make some kind of record that it is a gift? My apologies if this is a silly question, I’ve only recently moved to Australia so don’t really know the rules with this sort of thing.

    Thanks,

    Marie

  16. Hi,

    Slightly offtopic
    Im a small business owner and every now and then i give my clients gift cards. Are these tax deductible?

    Thanks
    Mark

  17. Bernadine on said:

    My daughter has been renting my investment home. If I sell the property and give her my gains, will I be penalised later. I will be on an aged pension in 2 1/2 years. Thankyou

  18. Andrew Jeffers on said:

    Hey there.

    Sorry I have had some issues with the email not getting through but it has been rectified.

    As usual this information is not specific and is of a general nature and I do not warrant this information is always 100%

    OK lets start

    17 . Bernadine – I think your question relates to the pension. Sorry check out centrelink to see. I do not know there rules.

    16.Mark – Small gifts intended to generate business are tax deductible. Gifts given for work done and completed with no further intension of more business are not.

    15. Marie – No Tax , keep a record , nothing to report unless asked.

    14.Lindy – Read the article above, your answer is there.

    13.Tia’s Mum – Several issues not the least centrelink. No tax issues here check out with centrelink and the aged care facility themselves. This is very off topic sorry.

    11. Chris – Read the article the answer is there.

    10.Kris – Another pension question. Please check with centrelink about how this affects the pension.

    9. Pushpendra – Please read the article.

    8. Linda – American?? Nope. I was educated under the Wyndham system in NSW at North Sydney Boys High School. Unfortunatety at that time spelling and grammer were not as important as in prior years. Please forgive my spelling and gramatical errors but be assured i am 100% aussie born and bred.

    There are some good questions here so I suggest you read the article again for some answers and also unfortunately I do not know about the limits for centrelink but If I get some time I will look into it. It seems to be a hot topic.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    www.aussietaxtime.com
    aj@aussietaxtime.com

  19. Hi Andrew,

    I have a home loan with an offset account. My fiance (not de-facto) has a large sum of money – about $200K that she is considering putting into my offset account (to save on my non-deductible interest) and also reduce her interest which is taxed at the top marginal rate. We wil be married in about 12 months time.

    Are there any tax implications in doing this? Will the bank/tax office question why $200K suddenly appeared in my account?

  20. Andrew Jeffers on said:

    Steve

    Answer is no. That is a great idea to reduce your loan. Another thing if you wanted to invest this money in property property or shares what you do is reduce your loan down by the $200k (as the interest is not tax deductible) and then get a NEW and SEPARATE line of credit on the house to be used for investing purposes and then this interest will be deductible.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    www.aussietaxtime.com
    aj@aussietaxtime.com

  21. mariaane on said:

    hi, one of my elderly clients has got some shares, which she is thinking of selling. we were talking about her will and all, and she has some family issues, now my question for her is, how much money can she give to her children per year, as she wants to give it away while still alive, and so she can still decide who gets what.

  22. Andrew Jeffers on said:

    Mariaane

    there is no gift tax issues here. PLease have a read of the other answers above.

    You may have an issue with centrelink if the person is receiving benefits also you will have to pay capital gains tax if the shares were purchased after 19th September 1985

    Thanks

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

  23. My daughter now lives & works overseas. Her ex-inlaws are moving to a retirement home & want to ‘gift’ (ie sell to her at 1/10th it’s true value) her their valuable home in recognition the support & help she gave them while she was married to their son.

    Will any party have to pay gift tax? The home had never before been sold & is very old.
    Thanks & cheers

  24. Don Presley on said:

    My wife and I operate our own Super. Fund which is currently in Pension Mode. I understand that when she or I as the last Trustee dies the Fund reverts back to Accumulation Mode and becomes liable for Capital Gains Tax and then 15 % Tax on the balance before it is paid out to our beneficiaries. In order to minimise the Funds tax liability after the last Trustee dies are we able to sell part of the Super.Funds share portfolio each year and distribute the cash achieved to our children without us or them being taxed on this money, and if so, is there a maximum amount that can be given to each child each year.
    Many thanks for an excellent article.

  25. Don Presley on said:

    Found this website by accident when researching Gift Tax liability in Australia. Found it excellent.

  26. Andrew Jeffers on said:

    Claire,

    No Gift tax. But you will have a stamp duty issue. Stamp duty must be paid on the market or sale price whichever is greater.

    Don,

    1. Thanks – We really appreciate feedback and glad we could be of some help.
    2. Really good question regarding the SMFS. To be honest we will have to get back to you on this.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

  27. Annette on said:

    Hi… A friend wants to buy a house for the daughter . Would they first put the money in her account so she can pay it out and would that attract tax , the main question is if that money is gift taxed . Is recieving a house a gift tax issue .
    Can a person recieve any amount of money as a gift and not be taxed , but the income earned of it is taxable income ?

  28. Hi. My father wants to give me some money to start a business. If I pay back the money regularly is this considered an income for him and will either of us have to pay tax?

  29. It was a big confusion for me that if there will be any gift we inherited from parents or relatives , whether I will have to pay tax for that. I have got a clear idea from the information you have provided here. I read in ATO website about tax on gifts , but was still confused about employer gifts and other stuff.

  30. Julie on said:

    Hi Andrew,
    Thanks for your article – very helpful!
    You say that the only gifts that are taxable are ones which are, or could be construed as, payment for services rendered or regular, ongoing income. There would therefore be no cap on the quantity of money which could be gifted, tax-free to both parties, from one person to another on a single occasion when the gift is unrelated to work or regular income. Am I right? So there’s no difference tax-wise between a gift of $2 or $2,000,000.00?
    Thank you for your ongoing help to everyone on this thread!

  31. Kristy on said:

    Hi, I am planning on buying my parents investment house off them in July, they are planning on gifting me a portion of the house, is there a $ limit how much they can gift before I am taxed? Does it affect them with CGT?

  32. Mary on said:

    The family property was left to one sibling (due to a misunderstanding on the part of the deceased parent). All agreed that it really belonged to all but that the sibling would continue to live there and we wouldn’t pursue legal changes. Now that it’s being sold 20 years later, still just under her name, is there gift tax on the splitting of the proceeds? I’m guessing from the article it’s no, but wanted to check.

  33. My parents who are foreigners are intending to purchase a property under FRIB. My Husband and i will be living in this purchase property, in return we will be paying a weekly house maintanece fee back to them. At the end of 3 years they would like to give this property to us as a gift. They would peroidically be coming to Australia to stay & spend time with their grandkid and use this property as their place of residence. Will there be any CGT, Land Tax… tax of anykind applicable to any of the parties involved.

  34. Andrew Jeffers on said:

    Hello,

    It’s been a while since I got online but I will try and help out where I can.

    27. Annette – There is no gift Tax

    28. Not really if you pay him back a loan. If you pay interest on the loan then you may be able to claim it as a deduction and then he claims it as interest. Either way write make a loan agreement with the key terms.

    29. Irene – Glad we helped. Small gifts from employers generally do not have tax. Other gifts may have fringe benefits tax.

    30. Hi Julie – Thanks for the comments, I really appreciate it. To answer your question no difference between $2 and $2m.

    31. Kristy – If they give you a discount on acquisition then they will have to pay CGT on a fair market value. If the property was bought prior to Sep 1985 then probably no CGT. Also you may have to pay stamp duty on the full fair market value.

    32. Mary – No gift tax

    33. Livvy – Ok if they buy the house and I assume this is brand new house then you need to be careful with paying them money even if it is for maintenance. If they intend to make tax deductions for the property then they will be assessed at full market rent even though you are only paying them a small payment.

    If they give it to you after 3 year then they will effectively be making a sale to you and there may be CGT. Also if they buy the house without intending to live in it then it is NOT their primary place of residence and not able to claim the main residence exemption.

    They should just give you money and you buy the house to live in. Money to you is a gift and then you own the house and then you et the primary residence exemption.

    Not sure abut Land Tax.
    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

    If you want to get on my database then please send me an email with the subject line – Email list.

    Also we are always looking for new clients. As part of me answering questions for free if you would return the favour and tell people about this site and about Aussie Tax Time. Please join our facebook site www.facebook.com/aussie.tax.time as a fan and also out twitter account is http://twitter.com/aussietaxtime

    Many Thanks

    AJ

  35. Hi currently my mother has her own superannuation fund. She currently doesn’t receive a pension from centrelink. She wants to Gift us 200, 000. ( 100k each for my brother and me ) to buy a house. If this gift lowers her overall assets would this affect her in getting a centrelink pension. Are there any tax liabilities for my brother and myself in receiving such a gift ??

    Thx for your time

    bart

  36. I live with my elderly parents and we have discussed signing the house over to my name. I am on a disability pension Will i have to pay tax?

  37. Hi my brother and I have both contributed equally on an investment property. Given the current market condition, he is inclined to sell the property whereas I prefer to hold onto the property for a bit longer. As an incentive for me to agree to sell, he has offered me an additional sum of $20,000.
    If was to accept the offer, what would be my tax obligation in relation to the $20,000?

    Regards, Ben

  38. Karen on said:

    Hi, my brother in law and wife recently split up. Very soon after the split he found that their business ownership has been transfered to his mother in laws name. On top of loosing his business is he now going to be liable for taxes for “gifting” his business to his mother in law?

  39. Andrew Jeffers on said:

    Hello,

    35 – Bart not sure you need to c all centrelink

    36 – Dave, If it is the primary residence then probably no tax.

    37 – Ben , you must be carefull here. Send me an email to aj@aussietaxtime.com

    38 – Karen there are many issues here. Is the business a company? It is a sole trader, partnership? I cannot answer this without more details. Send me an email to aj@aussietaxtime.com

    AJ

  40. Ruth on said:

    Hi Andrew,

    Thanks for the great article, it was surprisingly difficult to find info about this on the ATO website and you have been very clear and helpful. I am trying to find out more about NEXUS. My husband and I have a friend who is also a work colleague and he has offered us a gift towards our mortgage, is this going to be income, since we have some work-related relationship? How can I find out more about this definition?

    Thanks
    Ruth

  41. Andrew Jeffers on said:

    Hi Ruth,

    Thanks glad we could help. Ok the Nexus only goes so far as employer / employee relationship.

    If your friend is a co-worker and not the person paying your salary and the gift has absolutely nothing to do with work ( like they gave you a new TV to work their shift over the easter break) then it would be tough to establish an employment relationship.

    The nexus test is really there to say ” did this person get a gift from me that should have been wages and hence taxable ? ”

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

  42. Hi AJ, thanks for assistance.

    One question. My grandfather would like to give $400,000 to his daughter. Nexus would consider a gift as far as I am concerned and she would not be liable for tax.

    Is my grandfather liable for tax though? If over 13000, is there a tax to be paid?

    Only thing I cannot seem to get clarified anywhere.

    Thanks
    Jo

  43. Andrew Jeffers on said:

    Hi Jo

    No employee nexus. No Tax

    You are only liable for tax if you may money auch as working for it , getting money from investments or selling assets.

    AJ

  44. Michelle on said:

    Hi,
    My mother is an aged pensioner and owns her home which is in a very run-down condition and needs to be demolished. She has no cash and I would like to help her out. Can I buy her a house in her name without it affecting her pension and would there be any gift taxes payable? Would there be any gift taxes if she gives me her house to either sell or redevelop?
    Thanks,
    Michelle

  45. David on said:

    Hi Andrew,
    Great site! My question is about inherited family homes; if my parents had both passed on & left 2 homes, one for me & one my brother, both built prior to 1985……. I have been told we cannot keep them as an investment each (as we own our own homes) without paying CGT- 30% market value? but will be forced to sell them within 2 years to evade this CGT. Is this correct? My folks are very worried that we cannot keep the homes they built so well without some penalty. Is there a trust that we could set up to protect us from the CGT?
    Thnx David

  46. My mother will be getting a compensation payment for pain and suffering, she wants to give me 100 thousand to pay of my home where we both live. Will she have to pay gift tax, i realise there may be some problems with centrelink reducing her pension. I am also on a carers pension i look after her full time.

  47. Brian on said:

    Hi Andrew,

    My wife’s family want to send some money from overseas each year for the next couple of years to help pay my wife’s daughters university and living expenses.
    The money would come to us (and they have already sent $2000 via my wife’s friend), probably a few thousand every few months time.
    We are giving her daughter $1000 to help her expenses each month (from my pay) and then we were going to put any money that comes in from my wife’s family in bank for our use – but am unsure if we will be taxed on it or not?

    Do you think this would be taxable? Is there a maximum amount they can send each year before it is taxable?

    Thanks,
    Brian.

  48. Mzhar on said:

    Hi
    I have shares of more than $10k. Can I transfer them to my daughter as gift or I need to pay CGT before transfer. Is there any way to minimize the CGT?

  49. shree on said:

    when a employer provides christmas gift to its employee ,is there any deduction???if yes how division 70 of ITAA 1997 support it???

  50. Rex Langthorne on said:

    I am an executor of an estate where the deceased did not leave anything to his son due to a dispute. The beneficiaries i.e. his brother and sister want to gift 65% of the estate (i.e. in excess of $400K) to the son. From what I have read taxation would not be applicable to the $400K gift. Can you please confirm?

  51. Alina on said:

    Hi Andrew,

    If someone were to pay me 4 mil directly into my bank account whether he be from Australia or not as a gift to start up my own business, I wouldn’t be taxed either?

  52. Richard on said:

    I develop an app in my spare time. I put it up for free. I have a paypal donate or equivalent on my webpage. A nexus exists? I am required to declare as income not as a gift.

    Correct?

  53. rebecca on said:

    my sister-in -law may be getting $50,000 from her in-laws living in Tonga as they sold their family property. I believe that there is no tax to be paid on gifts received. Is this correct? I am just a little bit confused as the Tax Guide says: “Where the activities of the recipient of a gift are of such a nature and exent that the receiptient is carrying on a business, the gift is assessible” My sister in law has her own business, does that mean that all gifts received are taxable??
    Just need clarification

  54. Lito on said:

    Hi Andrew,

    Your site is very helpful. I live here in Australia and periodically send money overseas to my immediate relatives (residing in another country). Can I claim it as a form of donation/tax deductible?

    Regards,
    Lito

  55. Andrew Jeffers on said:

    Hello All

    54. No you cannot claim it for anything unless your relatives are a registered charity and they qualify as a deductible gift recipient.

    53. It needs to be related to the business for their to be tax. Does she work for the inlaws in Tonga then maybe there is tax if it is a Gift UNRELATED to work then usually no Tax.

    52. Richard – Yes a nexus exists. Even though you call it a donation it is still money received for providing the app but on the flip side you can claim the cost of developeing the app ;)

    51. No and if you start a company it can be considered as either equity or a loan. If you want to know more about starting a company email me.

    50. No tax

    49. There is a break for one off gifts to employees. If it is under a certain limit then there is no FBT as long as it is infrequent. Also do you mean division 7A Division 70 relates to trading stock? Div 7A relates to loans to related parties like directors instead of paying wages.

    48. Generally you will need to pay CGT

    47. No that is fine even though there are regular payments it is NOT related to a Job or employment.

    46.There is NO Such thing as gift tax.

    45. David – Thanx – OK if you get the homes they are pre 85 assets so I do not think there will be CGT however when you get them it is a change of ownership which triggers a CGT event so the clock will start ticking on you for CGT when you end up selling them. OK so the folks have had them for 25 years say market value today is $500k you get them and then you sell them in 25 years for $1m then you would pay CGT on $500k ie the time you had them….. I am not 100% sure but in general this is how the prvision operates.

    44.Sorry I do not know about the pension restrictions.

    AJ

  56. Kenneth on said:

    Related to question 19, if I am in the process of obtaining a home loan, do I have to sell existing shares first, repay and reborrow as a separate line of credit and repurchase the shares to claim tax benefits?

    If I already have cash in the offset account, can I repay a similar amount to my share portfolio, draw a new/separate line of credit without selling off my existing shares?

    Cheers,

    Ken

  57. Steve on said:

    My son has paid rent and lived in a property I own for the past 12 years. He also worked in a small family business with me until 12 months ago. He is now on a reasonable income and can afford to purchase his own property. Would there be any tax implications if I were to gift him a portion of the property he is currently in, allowing him to borrow less?

  58. I am looking at buying my first house and therefore I am eligible for the first home owners Stamp Duty Exception for purchases below $500,000. The house I am looking at is in the $580,000 range. My question is, is it legal and tax free to “gift” the vendor $80,000 and then buy the house for $500,000, hence avoiding the Stamp Duty? I would save almost $20,000.

  59. Andrew Jeffers on said:

    Hello Again

    56 – Kenneth the issue is this. You can claim a tax deduction for interest when you borrow money to produce assessable income. The cleaner it is the better. I reccomdent to ALL my clients if you are going to use an offset account then use it either soley for personal use or for investment / business use or get a different line of credit for each.

    In the strictest sense if you do not sell the shares and use them to borrow against and then put the money you borrowed into your family home then you have not used the money for an income producing activity and then interest would not be deductible.

    If you sell your shares remember that you may have a capital gains tax issue.

    57 – OK so he is going to buy the house he has been renting from you. Remember the rent he has been paying you should be taxed in your hands. Also good point to note that if he is paying under market rent you could be assessable on FULL market rent. So back to the question there is NO gift tax but if you are transferring the house to him you could incur CGT.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

    57 -

  60. Hi Andrew,

    Thanks for your posts and advice, have already passed on your details to friends and co-workers with similar questions above.

    If you could please help with my enquiry:

    My mother owns her primary place of residence (no mortgage) she also has an investment property which she purchased for $260K. She wished to transfer, gift, whatever you want to call it into my name. I have searched and can not find any answers.

    What is the best way without paying anything to just simply transfer the house to my name whilst she is still alive. I also have a mortgage on my own property and wish to retain mums investment property as a IP still and not sell the property at all. Will I also be able to transfer it to my children and so forth?

    Cheers,

    Thanks heaps.
    Ash

  61. Nirmal Chandra on said:

    Quite informative article and Q&A.
    Gift from parents are tax free in Australia is my understanding .
    Is Australia having any rules covering money transfer from abroad even though it is from parents as gift ?
    I would appriciate your views. I am an Indian; my son lives/works in Australia and I would like to gift him from my savings.
    Regards
    Nirmal

  62. Hi. Great Article. Just wondering, my dad used to send me money from overseas while I was a student to help me pay for my rent/bills/cost of living, etc. Mind you, this wasn’t a sort of ‘once-off’ gift as he made regular monthly deposits into my account. I was also working casually at the time so the burden wouldn’t be entirely his. Is the money that he was sending considered taxable? It wasn’t so much of a ‘gift’ as it was an ‘allowance’.

  63. Hello Andrew.

    My wife is currently not an Australian resident (in UK) but is applying for australian residency soon with me as her sponsor. Her mother wants to give her $400,000 to buy a house in australia. Is there tax if she comes to australia with this money… and is there tax if she recieves it once resident there? Also are there any time limits for bringing the money to an australian account (for example, she has a certain amount of time to transfer it without being taxed)

    Thank you

    t

  64. Hi Andrew,
    Your blog is very helpful here.
    My parents they live overseas and they have a house in Australia since 1998 and me and my brother used to live there. Now my parents want to give the house to me, if the house transfer to my name, will there be tax or stamp duty (current value approx $800K)? Then I will keep it as investment and rent it out.
    Thank you
    Budi

  65. Hi Andrew,
    Continue from Q64.
    What if the house title transfer to my name and report under $500 so that I get my first home owner grant and I dont need to pay stamp duty. Will that be legal?
    Thank you

  66. Bryan de Pree on said:

    Hi Andrew,
    I am 72 years old and still in fulltime employment. I want to sell my house to my girl friend for the amount owing on the mortgage ($50,000). Do I have to pay Gift or Capital Gains Tax? I built the house myself from 1989-1996.
    Thank you so much.
    Bryan.

  67. Prashant on said:

    Hi Andrew,

    I own a land in India which was bought in 1991 by my dad in my name. Currenlty i a citizen of ausstralia, if i sell that land in india and get the money here , do i have to pay any CGT on that.

    On the other hand if my dad sells the land which he owns and sends me the money, are there any tax issue pertaining to this ?

    Thank you.

  68. Andrew Jeffers on said:

    Prashant: This is your property as it is in your name regardless of who paid for it. There is CGT to pay.

  69. Greg Bradley on said:

    Hi Andrew.

    My nanna, has recently sold her house because she had to be moved into a nursing home.

    As a part of this i received $50,000, do i need to pay gift tax on this.

    Any help would be greatly appreciated

  70. Cassandra on said:

    Hi Andrew,
    Thanks – you just saved me countless hours wading through the Tax Pack and the ATO’s website (gibberish – all of it!).

    Feeling very envious of all these commenters with wealthy parents gifting them enough cash to purchase the house of their dreams! :) I was “gifted” $40k from my mother on her deathbed to cover funeral and legal costs because she knew her husband was going to contest the will (of which he was left half her wealth).

    At least I don’t have to declare and pay tax on the 40k simply because it is in my name and not in the Estate. Give it all up in a heartbeat to have my mum back of course!

    Thanks again
    Cassandra

  71. Copy that(above). Great thread. But I still dont know how to use the word nexus in a sentence !

    Blurring the lines with the nexus thing…..my boss wants to give me a large cash wedding present. Does it ‘look’ different if the money comes from him personally or the company ?
    Weddings being a once in a lifetime event (maybe) – surely the ATO would not consider this income ?

    Thanks for any info….

  72. are there comments from no 60 on anywhere

  73. Hi
    I am an australian citizen. My dad who lives overseas and not an australian is selling one of his property overseas and wants to gift me approx 2 million one off. Is it possible to do a bank transfer of this huge amount from an overseas account to my local account? Any tax implications?

  74. My mum is selling her home. She wants to give me the money as a gift and i want to use the money to pay off my mortgage. Do i need to pay tax on the money she gives me????

  75. kulwant on said:

    Hi Andrew,
    My son and myself both are working and both are tax payers.My son asked me that dad, i could not save money and i want to give you $1000 per month and u give me back that amount after 2 years.Is that ok AJ.
    your advice will be appriciated.
    Kulwant

  76. C. Prasad on said:

    Dear Sir

    I want give a car as a gift to my daughter. I just want to know do I have to pay any tax on the car when I transfer the car into my daughter’s name

    Thanks
    C. Prasad

  77. C. Prasad on said:

    Dear Sir

    You answers are very good
    Thanks
    C. Prasad

  78. Hi Andrew, I own a property overseas which I bought in 1995 prior to migrating to Australia in 1998. I am thinking of selling this property and plan to invest the money in property in Australia as well as to pay a part of the mortgage. Do I have to pay any taxes when I bring the money here? The amount will be around $150,000.

    Thanks, Peter

  79. thanx

  80. Sherine on said:

    Hi Andrew,

    You have provided good advices to so many different types of question. But I have not seen anyone asked this question.

    If the money received is a gift does the taxation office requires any document proof?

    If I bring my money from oversea where I used to work before I moved to australia permanently do I need to pay tax on the said money brought to Australia as this money is a saving from my income oversea before I migrated to Australia and has been taxed in that country.

    Appreciate for your advice. Thank you.

  81. Hi there,
    Just wondering what legislation is involved with my Grandmother gifting me her house, and also her then paying me an amount of rent?
    Help would be greatly appreciated.

  82. Andrew Jeffers on said:

    Hello I have been away from this blog for a while but I hope to answer the outstanding questions.

    60 – Ash if she transfer the property to you you will need to pay stamp duty and if the investment property is pre 1985 then there will be no CGT for Mum but if it is after 1985 then there will be CGT. On the main residence there will be no CGT. Sorry always the ATO needs to be paid ;(

    61 – Nirmal – Yes gifts are tax free see above. Give him all you want.

    62 – Neil as long as you were not working for him there is no nexus hence no tax. Great Dad!!

    63 – Tim – No Tax – Not sure about any limit this would be covered by AUSTRAC under the Anti Money Laundering Provisions.

    64 – Budi Yes stamp duty and CGT for the folks.

    65 – Never lie – It always comes back to bite you. Be a good citizen and pay the taxes , we live in a great country because people pay their dues. Never pay more but pay what is right ;)

    66 – Bryan – You can sell your house for $50k but you will pay Stamp duty on the full amount. No CGT if this was your primary residence.

    69 – Greg – There is NO GIFT TAX – Please read the article.

    70 – Thanx Sorry to hear about your Gran. ;(

    71 – Hmm to be honest Dave this is related to your work. Did you know your Boss beforehand? ere they a good friend? Have they given you things before? Pretty much I would advise this is work related payment. Sorry

    72 – Jay – Sorry I have been busy commenst coming now.

    73 – No Taxes but AML issues maybe see previous comments.

    74 – Esta There is NO GIFT TAX – Please read the article.

    75 – No issue here. You are doing a savings plan for him. You will have to pay tax on the interest. Why not open a new account in his name and not let him sign and get a direct deposit from his account?

    76 – C. Prasad – No TAX

    78 – Peter – As a tax resident in Australia you will have to pay CGT on the asset from the time you became an australian TAX resident (this is different from immigration resident) You may also have to pay tax in that country. If there is a DTA (Double Taxation Agreement) you could get an Australian Tax Credit.

    80 – There is no gift tax. If you are questioned you may have to provide evidence to show it is a gift or from savings. Also it depends on the country see the above answer. Generally if you have paid income tax on it in another country and this is after tax savings there should be no issue.

    81 – Legislation is the Income Tax Assessment Act. There is Stamp Duty (not sure of the legislation). If you mena what legal documents you require you will send a sale agreement, a valuation and a renatl agreement, This is a resdential rent so there is NSW legislation being the residential tennancy Act.

    Thanks and please hit our facebook page and like us.

    AJ
    http://www.facebook.com/Aussie.Tax.Time

  83. Hi

    I live in my parents’s investment house and I don’t pay any rent. They now would like to sell the house to me based on the property valuation (market value) ie $700K. I will get a homeloan from the bank to buy the house and live in it. I will pay a stamp duty and parents will pay the CGT. Then parents is thinking of giving cash gifts of $200K each to me and my sister. I will be using the cash to reduce my homeloan (principle residence). My sister may use that cash to buy shares or investment property.

    Can you please confirm if no tax is payable for parents, me and my sister in relation to cash gifts?
    Is it correct that only tax implication is related to income generated from the investments on shares or investment property for my sister?

    Thank you so much

    Thanks for helps

  84. Hi Andrew,
    Firstly great job and great site.
    I understand that there is no tax if gifted from Parents to children.
    What if it is gifted directly from the parent’s company direct to children?
    Is this possible?
    Is it declared an income?
    What implications may this have?

    Cheers
    Mal

  85. Andrew Jeffers on said:

    83 – Sunny – you have a great understanding of the taxes.You are correct no tax on the $200k Gift to you or your sister.

    84 – Mal – Thanks for the feedback ;) Under the act to get a tax deduction you need to be producing an assessable income. Hence the company giving you cash as a gift would not qualify as a deduction or at the worst case you would be considered a Director Reated Entity ( ie your parents are the Directors) and any gifts you would have to pay FBT. Its like you get a car from the company but your parents would still pay FBT on that car because it is for private use and ecven though you do not work for the company you are only getting the car as a direct relationship from an employee, ie your parent.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

  86. Hi Andrew,
    My parents (retired & living on super) want to sell their house and use the money to pay ours off. We would then purchase another house for all of us and rent out the one paid off.
    Would they be taxed on gifting us $226,000?
    Thanks so much.
    Mel

  87. I coach a young athlete (not for money), and was wanting to set up a separate bank account for people/businesses who have expressed a willingness to donate some money to him/us to help with travel and accommodation requirements to get him to events around the country and world. Was wondering best way to do this, and if the donations would be taxable? I cant see any nexus between that and his income or mine, our jobs are unrelated to his competition but don’t want to end up in the poo over it. The ATO site is a bit of a minefield for the untrained and I havent had any luck there.

  88. Rochelle on said:

    My mother owns a house at the front of a block (total block 1200m2) and a 600m2 vacant battle axe block at the back (bought before capital gains tax). My mother doesn’t work but my husband and I do. We are both full-time employed. We have no debts and no outgoings as we live with my mother and have combined pre-tax incomes of 300K pa. My mother has the equity in the block but no cash flow. We have 50K equity and cash flow. We need approximately 500K to build on the vacant block and 150K to renovate the existing house.

    Questions:

    If the block is in my mother’s name I don’t think we will be able to take a loan to do this so if she needed to amend the titles (and give us the back block as a gift worth min750K?) and would we have to pay gift tax if we are going to develop the block and then sell the property shortly after completion and keep the profit?

  89. Peter Smith on said:

    Hi,
    I own a company which in turn owns the home I am living in.
    Therefore I technically do not own my own home.
    Up until last year, i have not been paying any rent for this home.
    I will be paying some form of rent from now on which I understand can be offset against depreciation of the property.
    Anyhow, I would now like to own this home.
    If the company “gifted”me this home, what would be the tax implications?
    The home is valued at $1million and costs to build plus other costs amount to approx. $700,000.00
    Guessing I could be up for stamp duty on $1mill. plus CGT on 300K?
    Thank you

    Peter

  90. We lost all our belongings in an arson attack and a benefit was held for us and raised over $9000. Is this a gift? Do we have to pay tax?

  91. Stacey on said:

    Andrew,

    Great help! Your patience with repetitive questioning and commitment to answering posts by helping people out with free financial advise restores my faith in humankind.

    Thankyou!!

  92. Hi,

    My wife and myself are supposed to get an inheritance amounting to about $300,000 from India. We plan to invest the money in a property in Australia. First I think from your article it seems that there would be no tax liability for us. But is there a time period within which that money can be invested?

    We also have a property of our in India and would like to sell it in the next 4-5 years. Would there be a CBT liability for that and what is the percentage? Also, do we get a rebate if we invest the money in property here?

    Thanks in anticipation.

    PF.

  93. david on said:

    hi

    very grateful for your advice

    i have a property with a loan from my father overseas.I have been paying 10% withholding tax on the interest payment

    if he forgives the loan totally to me, about 400k worth, are there any tax consequences?

    also, i have not been paying back the interest to him regularly..would that create any problems with ATO?

  94. david on said:

    in addition to the previous queries

    it is an investment property

    would it matter if the loan were from a distant relative overseas or even a company overseas?

  95. daniel on said:

    hi
    thanks for this wonderful blog..just priceless!!
    question:

    if i were to buy a car and lease it to my son as a straight business proposition with no employment related issues, where he pays me a monthly payment, and he does his own maintenance, would i be able to claim the car as a business expense as well as the normal depreciation? and would FBT be a concern?
    thanks
    daniel

  96. Andrew on said:

    Hello All,

    Happy Easter , Passover , Holidays…We answer these for free to try help people and to boost our profile. Please let people know about us. Resend our work. retweet, whatever and also please like us on Facebook. ;)

    OK

    86 – There is no Gift Tax. Please read the thread ;) You will have other concerns like CGT possibly.

    87 – Paul – Good question. Look to be honest I am not 100%. I will need to do some research. I think it should be ok BUT there i something in the tax law that states if you turn it into a business then you will have to pay tax. Email me or call 1300 886 066

    88 – Rochelle – I do not know about the loan ask the bank. There is no gift tax please read the thread. If you transfer the title then you will have a capital gains tax event and stamp duty even though it is exempt. Get some written advice of the best way to go. This is a complicated issue.

    89 – Peter – You have some serious issues here. Regardless of the actual rent paid the company needs to include the market rent in its income and it can also claim interest, depreciation etc. You cannot gift the house to yourself from the company as there is a nexus there. If you give the house to yourself you will have to deal with Fringe benefits tax. There is also then the CGT issue and stamp duty. Also you should have one property in your name to claim the CGT principal place exemption. You need proper advice on this. Call Ravi from our office and make an appointment 1300 886 066.

    90 – Neale – I am not 100% but I would not think it is included. Gifts from unrelated people.

    91 – Stacey – You are a beautiful person ;) Thank you for the acknowledgment all I ask is you let people know about Aussie Tax Time and that we care and are here to help.

    92 – Hello – No Time limit no Gift Tax. Yes if you are Australian Tax Residents then yes you will have to pay CGT. How much depends on your personal circumstances. Also putting money into Property here is called roll over relief. Email me full details.

    93 – David . No Gift Tax. Also the interest is no deductible to you so the ATO does not care really. This is an issue for the other taxing state about the income your father is declaring from the payments. Hopefully Dad is claiming the credits from the withholding tax

    94 – OK So you are claiming the interest! Alright you claim what you pay no problem. As for the gift – Unless you worked for the company OS then usually no.

    95 – OK if you bought the car and leased it to your son in your name then it technically is a business. You would have to make money from it. So he makes the payments to you which includes a portion of income for you. You then pay the lease?? If you owned a business an the leased the car and gave it to your son then YES FBT is applicable. FBT covers family and related people. I need more facts to determine why you are doing this. Email me.

    Again thanks everyone and remember this is General advice.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com
    http://www.facebook.com/aussie.tax.time

  97. daniel on said:

    re. no 95………i would buy the car in my personal name, leased it to my son who is self-employed in his own biz. I also own my own biz but has nothing to do with his.

    so leasing the car to him…would that still attract FBT in my case and in his?

    reason i do this is so i can claim depreciation etc, as well as him being able to claim on his leasing expenses/
    or do you think that it is not feasible or tax effective?

    thanks again

  98. Paul K on said:

    Hi Andrew,

    We, my parents, sister and myself, own a house in Melbourne, Victoria. The title has 4 names on it currently. And now my parents and my sister wants to remove their names from the title as gift, so I can have the sole ownership of it. The intention is once the ownership of the property is transferred to myself, I will not be selling the property but rent it out as I live in Sydney.

    Questions:
    Will this be considered as sale of the property, therefore attracts the stamp duty?
    And/or will this be considered as gift therefore attracts the gift tax?

    Thanks for your help in advance.

    Paul

  99. Andrew Jeffers on said:

    Hello All,

    97 – Daniel. This is not feasible in my opinion. You cannot double dip ie one two people getting a tax deduction. One will get depreciationa dnthe other will get the interest. Again you need to have a business to be able to claim deductions. I think you are making this complicated and should just let your son lease it directly.

    98 – Yes there is a disposal of an asset. Do you all live in this house? There may be CGT and there will be Stamp Duty. No gift tax! Also if it is an investment propoerty then you will have a split asset for CGT. Ie you originally bought your 25% share for X and now the other 75% you will buy (at market value for CGT and Stamp Duty) as a different cost base for CGT. So you will essentially have two cost bases on the same asset.
    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

    If you want to get on my database then please send me an email with the subject line – Email list.

    Also we are always looking for new clients. As part of me answering questions for free if you would return the favour and tell people about this site and about Aussie Tax Time. Please join our facebook site http://www.facebook.com/aussie.tax.time as a fan and also out twitter account is http://twitter.com/aussietaxtime

    Many Thanks

    AJ

  100. Paul K on said:

    really?
    thanks for your response but it want exactly what I was looking for…..

    well, currently my parents live in the house, and they pay no rent. Nor myself and my sister lives at the premise.

    And I just want to transfer the title, so I can refinance it alone and hopefully to get some tax leverage if I structure it in the way that my parents to pay rent going forward.

    Also, my parents do not want to own the place any longer as I pay for everything including council rate, water etc.

    I was hoping to transfer the title without any stamp duty obligation as I do not want to pay over $50,000 of free cash in one time.

    So what if i can justify that I own 99% of share of the property, therefore i will have to pay for only 1% of sales value? is there any ways to do this? we haven’t specified any proportion by person when we purchase this property in 2003.

    I just want to avoid paying rather large lump sum of cash as stamp duty.

    Thanks

    PK

  101. Hi Andrew,
    Great site – thanks!!
    Two things:
    My father has offered me an interest free loan to pay off my credit cards to be repaid at a rate of $300 per month. I have drawn up a loan agreement specifying the amount, the rate of repayment including the date to be repaid each month, that the rate can’t be reduced without consent of borrower (my father) but additional may be paid and a header describing the loan and a statement that the loan has been executed on such and such a day and location and the schedule for the draw-down (which will be in three payments over 2 months). I believe this provides a document signed as evidence that it is a loan. I assume there is no gift tax as the amount will be repaid on an agreed schedule and will be 0% instead of the 22% or so charged by credit card companies and will allow me to pay more off my mortgage and save more.
    The other question I have is that I inherited a stamp collection from my grandfather upon his passing. If it has substantially increased in value (it was worth around $50k at the time he passed away about 30 years ago) and say I sold it for $100k or $200k I assume it would attract tax (CGT) based on the difference between the value at the year of inheritence and the value upon sale? Is this correct?
    Many thanks.

  102. ElJay Prato on said:

    I’m due to receive $300000 cash from my father (inheritance) in a months time. I live in Australia. Am I going to get taxed? Thanks.

  103. Frank P on said:

    Hi Andrew,
    Thanks for this post. I’m sorry if this has been asked before (too lazy to read all the previous comments)

    I live in Australia and my stepson’s father sends him a sum of around $20k yearly for support him. The money is transferred from overseas and lands directly in his account. My wife and I use some of the money to buy stuff for him and he disposes/saves the rest.

    So my question is…

    Am I gonna be taxed for that? DO I have to report it to ATO in my tax declaration?
    Thanks heap.

  104. Neale on said:

    So in answer to my question as per question 90. Gifts can only be accepted from relatives to qualify as gifts? Or these donations are considered gifts? I saw in an earlier post that a friend gave another friend money to buy a house and that was accepted. I’m a bit uncertain of this answer?
    Sorry!

  105. San Remo on said:

    If I were to get a large money gift from my aunt overseas, say $3 million dollars, would I be gift taxed or income taxed? Can she just sent it directly into my account or will this need to be reported to the tax office with evidence etc..

    Thanks.

  106. Bett on said:

    Hi there Andrew,

    Just a quick question. If my father inherited a property (built pre 1985) and wants to pass on this inherited property to me, what are the CGT, Stamp Duty, Gift Tax implications.

    Cheers
    Bett

  107. We won a 2nd prize worth USD 200K from a Malayasian based company for an anniversay contest. They are going to send it via a bank draft which I will deposit straight into my offset account. Do I have to declare this in my tax returns.

    Cheers Ash.

  108. Hi there,

    My fiance and I are currently living in his grandmothers house which his father inherited about 6 years ago. We do not pay rent.
    Is it possible for them to gift this to him without any tax repercussions by either party? If not what would the repercussions be?

    Thanks, Jess

  109. Nathan on said:

    Hello,

    I’m writing a letter of advice for a taxation law assignment at Curtin University in Perth. Basically, the gist of the assignment is that a student has been offered three different “prizes” for outstanding results in his taxation course.
    $1,000 cash prize, which I know is non-assessable as it is not considered ordinary or statutory income under s 6-5 and s 6-10 of the ITTA.
    A briefcase valued at $1,200 which has the students name embossed on it aswell as the name of the award for his achievement. Which I figured is not assessable income due to the above reasons and because it has no value due to anyone other than the student himself due to the engravements.
    The final option that the student can choose from is a monthly payment of $100 throughout his final year of study. Am I right in saying that this is assessable income as the gift is periodically paid and can be considered income?

    Cheers!
    Chances are you won’t reply in time as this assignment is due in a few hours, I will let you know how I go though :)

  110. Thank you in advance for your answers. My father is planning to sell his primary residence and share a portion of the proceeds of sale with his children and transfer this amount to us in Australia by bank Transfer. Is this amount taxable in Australia and does it need to be declared specifically to the Tax office as it will be legally transferred?

  111. Hi Andrew,
    Great site, have recommended you to all my friends so hopefully you will get lots of new clients. I currently live in my fathers home (originally meant to be an investment property but family have been living in it for the last 20 odd years). I do not pay rent as such but do pay all the maintenance costs and the land and council rates. This house was purchased pre Aug 85 by both my parents and then my mother passed away in 1996. So does this mean that from 1996 onwards my father would be liable for cgt? Also originally this house was willed to me but my father has since changed this to be sold and divided equally between myself and my three sisters. Can I legally purchase the house from him for less than market value before he passes with the proviso that he be able to live here with me until such time as that occurs? It would be rent free for him and I would be his carer. He is getting rather elderley and does not wish to enter a nursing home. He is a self funded retiree so there is no centrelink problems to consider.
    Two of my sisters are on disability pensions and if the house were sold and the money distibuted I believe this may have an impact on their payments, can you confirm please?
    Thanks
    Shirl

  112. Hi Andrew
    I am an Australian who lived overseas for nine years. First in NZ and then the UK for the past six years. During this time I have not been a tax resident of Australia. I did not earn any money in NZ so did not pay tax there. I have an income in the UK where I do pay tax.

    A few years ago I formed a family trust in NZ and this trust jointly purchased 50% of a house in NZ with my husband’s NZ family trust owning the other half. We lived in for a few years but the house has never been rented out so there has been no income from it.

    My husband and I are now divorcing and his trust will buy out my share of the house. (about $200K). There is no CGT in NZ.

    I have no bank accounts in NZ and want to know the tax implications of having the funds from my share of the house transferred to my personal bank account in Australia.

    Thanks for your advice.

  113. Hi Andrew,

    we are Australian residents for tax purposes, however, we are temporary residents in terms of our visa subclass and still Russian citizens.
    My husband is a student ( we are not on student visa, we are skilled migrants).
    We’ve worked hard in our home-country and brought enough money to Australia, so we could live and not work for our first year after in Australia. I started to work from the second year and my husband commenced his study as a full time student. However, I didn’t earn enough money for both of us and for his study, so our parents supported us. They’ve sent us about 30K within the financial year, sometimes there were a few transactions per month (when we had to pay for study) and sometimes none. My mum always used her account to send us money and she put there a statement “for my daughter’s personal needs”.
    I just realised that it might look like regular income, while it is still some support from savings but received as soon as required.
    Could you please clarify would it be considered as a taxable income?
    If it is not taxable, should this bank statement be sufficient to confirm that it is a gift from parents or any other evidence is required?
    Thank you in advance!

  114. Francis on said:

    Hi Andrew,

    Really appreciate your blog. This is a hypothetical question to clarify an item on the tax return

    I understand that there are no taxes on lottery wins, and as the person making the gift(s) I would pay no gift tax if I were to give my adult children a share of a lottery win to purchase a house. However, the tax return they complete, as recipients, asks the question, “Have you received a gift of more than $10,000?” Would such a gift be included in their taxable income or affect the amount of tax they pay on their income?

    Thanks for your great advice.

    Francis

  115. Hello there
    My mum lives in Australia and I in the UK. She sold her home after my dad passed away in 2008 and the money has been in the bank since. She has now decided to gift the money to my brother (in oz) and myself (resident in the U.K.).
    I have checked with HMRC here and they said I would not be liable for tax as my mother is resident of another country but to check there laws, it seems to me that there would be no Australian tax liability either.
    Am I correct?
    Thanks in advance…

  116. Dear Andrew,
    Thank you for your help! Your advice was great and very helpful! Now I can be worry free!

    Regards,

    Grace

  117. Andrew Jeffers on said:

    Hello All,

    Sorry I do not always check this so if you really need an answer ASAP email me @ aj@aussietaxtime.com or as grace ( former comment) call me on 1800 886 066. Also some of my comments have not come through so I will chat with Neerav the owner of the site.

    OK so lets get to it. PS merry Christmas, Happy Chanuka or happy holidays whatever you are celebrating. Have a good new years as well.

    Also be advised I cannot see the numbers anymore? Not sure why.

    Paul – Answer still stands and you need actual advice. Go and see a good accountant and or lawyer

    W – Yes loan agreement is good to establish the loan. No Gift Tax. Also the stamp collection. Yes you are correct. There is a provision in the CGT act for personal items to be excluded but I am pretty sure the stamp collection valued at $50k is over the personal asset limit. Remember you also have indexation.

    Eljay – Please read the blog you answer is in here.

    Frank P – Yes you are lazy! joking!! no Gift Tax

    Neale – Gifts can go from anyone so long as there is NO nexus between the gift and employment – Read the actual article.

    San Remo – Again read the article and read other answers – No Gift Tax

    Brett – There is stamp Duty, No Gift Tax and possibly not CGT as your father received a Pre CGT asset through an estate.

    Ash – No

    Jess – Stamp Duty, Possible CGT depending on the circumstances.NO GIFT TAX!!

    Nathan – Email me next time aj@aussietaxtime.com

    Vince – NO GIFT TAX!

    Shirl – A Little bit complicated. pre 85 asset no CGT. Less than market value is OK but you will need to pay Stamp duty on Market Value. I cannot advise on centrelink but depending on the size of the asset it may or may not. You can have some assets and still receive a full pension.

    Annie – Are you a tax resident of Australia now? If not then no Aussie tax but you may be up for CGT in the UK. Need to check the UK.

    IK – There is NO GIFT TAX…… No need to report anywhere.

    Francis – There may be taxes related to lottery winnings in an investment scheme and also on prize shows but generally the answer is no. As to the $10k are you talking about Australia? This is an issues in the states but not here. I do not know about this if you can tell me the section number in the return I will get back to you.

    Janet – No Tax

    Grace – Great to talk to you and happy I could help….

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com

    If you want to get on my database then please send me an email with the subject line – Email list.

    Also we are always looking for new clients. As part of me answering questions for free if you would return the favour and tell people about this site and about Aussie Tax Time. Please join our facebook site http://www.facebook.com/aussie.tax.time as a fan and also out twitter account is http://twitter.com/aussietaxtime

    Many Thanks

    AJ

  118. Natasha on said:

    Thanks for your great article.
    My Aunt inherited my grandfathers house when my mother passed away. As she left no will – my aunt told my sister and I she would sell the house and split the money between us.
    She now says she can’t give me more then $10,000 a year or she will be taxed.
    According to the info above – this seems to be untrue.
    Can you please tell me if its true and if so what percentage would she have to pay ?
    Thanks so much!
    Tash

  119. Andrew on said:

    Natasha

    Did your aunt move into the house? If yes and it was her primary place of residence then there would be no CGT and no Tax. If she did not move into the house then there may be capital gains tax? Anyway I am not sure what your aunts means but based on this information only i would suspect she may be mistaken.

    Andrew Jeffers
    CEO
    Aussie Tax Time
    http://www.aussietaxtime.com
    aj@aussietaxtime.com
    If you want to get on my database then please send me an email with the subject line – Email list.

    Also we are always looking for new clients. As part of me answering questions for free if you would return the favour and tell people about this site and about Aussie Tax Time. Please join our facebook site http://www.facebook.com/aussie.tax.time as a fan and also out twitter account is http://twitter.com/aussietaxtime

    Many Thanks

    AJ

  120. Dana Trout on said:

    Hi

    My Mum is going through a divorce and is on the aged pension. When she gets her money through she wants to buy me a new family car which is worth around $45 000. Does this mean she is not allowed to give me the car because of the $30 000 over 5 years rule? She has never given me any money before.

    Thanks
    Dana

  121. Katherine on said:

    Hi! I hope you’re still checking this! So my issue is this… I have a friend from work who has a lot of inheritance/income in overseas bankaccounts and she has recently been trying to acsess it – it has been a long process and has had to ask for help paying some of the related taxes/fees to do. So i leant her some money. She has since said that she would like to gift me some of the inheritance. Initially i said no to interest and so she insisted that it was a gift and so i couldnt say no… Do i then need to pay gift tax on that???
    Thanks, Katherine

  122. Hi,

    I had a question on property investment. Basically we were planning to buy our first home in SA but the one that we have liked is given on rent currently for the next 4 months and then we plan to stay in it ourselves. I wanted to check if there is any tax liability because of this.

    Regards,

    PF

  123. What sort of documents are required when being audited by the ATO regarding large sums of money (1 millions plus) which is being gifted by a relative and sent to Australia? There doesn’t seem to be much info on that on the web. Also at what regularity does it not constitute income – i.e. what if the relative send a similar amount each year will the ATO see it as income?

    Thanks
    Tolec

  124. SHARON on said:

    Hi
    My mother wants to gift her 50% share in a property to myself and husband .
    The house is under contract when it settles she wants to gift us her share
    do we have to pay tax on that? Our share of the property was inherited after
    my father passed away. Do we pay CGT on that? it was purchased by mother and father in
    2000 as their sole residents.
    thanks
    sharon

  125. John ellison on said:

    Hello,

    My father sold his company in Australia 2 years ago. I am living in Europe and have acquired the nationality of this European country since 7 years. My father would like to give me a substantial donation, in cash by bank transfer. Is he taxable in Australia?

    Kind regards,

    John

  126. John Ellison on said:

    Hello,

    My father (australian nationality) sold his company in australia. He would like to give me a substantial gift (by banktransfer). I am living in Europe and acquired the nationality of my guest country. Is this gift taxable?

  127. ronnie on said:

    Hi,
    have a small start up business, 40K a year turnover presently.
    have an investor buying 49% of the business. his payment for shares goes straight into the business, and his goodwill donation is given to me personally.
    Am i liable for tax implications on the goodwill amount?

    Ronnie

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