Tax on gifts and inheritances

In Australia, gifts and inheritances are generally not considered as income and don’t require you to pay any Australian taxes.

We define a gift with the following criteria:

• there is a transfer of money or property.

• the transfer is made voluntarily.

• the donor does not expect anything in return.

• the donor does not materially benefit.

If your gift fits the above criteria, you and the gift giver don’t pay tax on it. There’s no limit on how much money you can give or receive as a gift!

However, there are some occasions where tax may be payable, or capital gains tax (CGT) may apply. For example, in some instances when gifting property, shares or crypto assets, or when receiving money or an asset from a non-resident trust.

My parents want to give me money – do I have to pay tax on it?

No, gift money does not form part of your assessable income and you don’t have to declare it, regardless of the amount.

We understand family or friends might give you money to put towards a home deposit or to help you out with everyday living or study expenses. However, if that money goes on to produce income for you, for example bank interest, then this will become part of your assessable income.

A family member living overseas wants to give me money as a gift. Do I pay Australian tax on it?

In most cases, no.  A gift from a foreign resident for tax purposes, whether it’s money or an asset, is treated the same as a gift from someone who is an Australian resident for tax purposes.  If that money or asset goes on to produce income for you once you own it, then you’ll pay tax on that income.

If the money or asset has come from a foreign trust, even if received through another person, you may need to include the amount or value of the asset in your assessable income. You can find out more on ato.gov.au, about receiving payments from foreign trusts. this opens in a new window 

How do I prove money I’ve received is a gift?

The good news is if the money is a one-off gift, we won’t look at it for tax purposes. You won’t need to send us proof unless we ask for it. In this case, ask for a letter or other written evidence from the gift giver. They just need to state that the money is a gift.

Do I pay tax if I gift someone money or an asset, like a house?

Money

If you gift money to a friend or family member there are no tax implications for you or the receiver.

Assets

If you gift someone an asset like a house, we consider that transaction to be the same as you selling the house, and capital gains tax (CGT) will apply.  If you’re entitled to the CGT main residence exemption this opens in a new window , it still applies.  If you’re not entitled to the CGT main residence exemption, or are only entitled to a partial exemption, you may be liable for tax.

I receive government benefits – will gifting money to someone impact my payments?

Giving away money or assets may affect you or the gift recipient if either of you receive government benefits.  For more information, we encourage you to check out the Services Australia's 'gifting' topic this opens in a new window  on their website.

How are other gifts like crypto assets or shares taxed?

Shares and crypto assets are known as capital assets, just like property.

If you’ve been gifted shares or crypto assets, you:

• only pay tax on any income produced by the shares or crypto assets

• may be liable for tax when/if you dispose of the shares or crypto assets later.

If you’ve gifted someone shares or crypto assets, we consider that transaction to be the same as you are selling the asset, and you may be liable for tax.

If you inherit shares or crypto assets, you:

• don’t pay tax at the time of receiving them 

• are liable to pay tax on any income produced by them 

• may be liable for CGT when/if you dispose of the shares or crypto assets later. 

You can find out more on ato.gov.au about the tax consequences of selling shares this opens in a new window  and crypto assets. this opens in a new window 

I’ve received an inheritance from a deceased estate – do I have to declare it?

In most cases, no. Generally, as the beneficiary of a deceased estate, if you inherit money or assets such as property or jewellery, you don’t have to declare it unless: 

• the assets are left to tax-advantaged entities such as charities, or to a foreign resident this opens in a new window  

• you inherited a dwelling from a foreign resident this opens in a new window . 

However, once you own the inheritance, you’ll pay tax on any income earned by it, for example bank interest or rental income.  You may also be liable for tax if you dispose of an inherited asset later. 

If the inheritance you receive is super from the deceased’s super fund, it’s called a super death benefit.  The super fund trustee will inform you if tax is payable, and if the tax will be deducted from the super death benefit.

You can read more here if you’re the beneficiary of a deceased estate this opens in a new window .