I want to send money to a couple of friends as a gift. I told them that I can send them the money through my bank, paypal or western union, but they told me that because they run a business, the gift will be taxed. Is this correct?
The only rules that I know apply to gifting money is that you cant do more than $10,000 in cash and assets in a financial year and no more than $30,000 over five years. And its a one-off type payment.
Also, you dont pay tax on gifts, even as a sole trader since you use your own personal tax number as the business' tax number.
You do however pay tax on the interest earned from the gift.
I think their concern is that because the money is being sent to them, whether going to their personal or business bank accounts, that it would be towards their business, however if its marked as a gift payment, they really shouldnt have any issues as long as its below the $10k.
If you are sending more than $10k, then there would be problems with the tax side. There is more on this link below regarding gifting if you havent read such over.
https://community.ato.gov.au/s/article/a079s0000009GnFAAU/tax-on-gifts-and-inheritances
The only rules that I know apply to gifting money is that you cant do more than $10,000 in cash and assets in a financial year and no more than $30,000 over five years. And its a one-off type payment.
Also, you dont pay tax on gifts, even as a sole trader since you use your own personal tax number as the business' tax number.
You do however pay tax on the interest earned from the gift.
I think their concern is that because the money is being sent to them, whether going to their personal or business bank accounts, that it would be towards their business, however if its marked as a gift payment, they really shouldnt have any issues as long as its below the $10k.
If you are sending more than $10k, then there would be problems with the tax side. There is more on this link below regarding gifting if you havent read such over.
https://community.ato.gov.au/s/article/a079s0000009GnFAAU/tax-on-gifts-and-inheritances
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