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Synthman(Newbie)Newbie
23 Jan 2024

I want to lend 300k to my relative who is studying in Australia. He would like to buy a small apartment to live in while studying paying the high rent.


His parents from overseas will pay me back in the form of a gift of 300k in the future when they have the money. The overseas bank needs a reason for sending the 300k and "gift" is the only option suitable. Will this "gift" be accepted by Australia as a repayment to the money I have lent out before, and will not be seen as income or monetary asset in the future?


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1,176 views
1 replies

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Most helpful replyATO Certified Response

WendyATO(Community Support)Community Support
ATO Certified Response24 Jan 2024

Hi @Synthman,


That's a very kind gesture and great you want to help out a family member.


A genuine gift is not paid back in money, material benefit or an advantage in return.


If you're providing a loan not given as a gift, where there has been an expectation to receive the funds back. The person being the parents paying the loan is not giving a gift, they're returning money previously borrowed.


The loan between family members would not have tax implication unless, when you provide the loan have charged interest. The interest would be a reportable taxable income on your tax return as the person who lent the funds to the family member.


I would also keep some sort of record of the loan. In case you need to provide it was loan, who to and the conditions. Whether you will be charging interest on the repayments.


We have handy news article called Tax on gifts and inheritances that also outlines criteria for a gift.

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Most helpful replyATO Certified Response

WendyATO(Community Support)Community Support
ATO Certified Response24 Jan 2024

Hi @Synthman,


That's a very kind gesture and great you want to help out a family member.


A genuine gift is not paid back in money, material benefit or an advantage in return.


If you're providing a loan not given as a gift, where there has been an expectation to receive the funds back. The person being the parents paying the loan is not giving a gift, they're returning money previously borrowed.


The loan between family members would not have tax implication unless, when you provide the loan have charged interest. The interest would be a reportable taxable income on your tax return as the person who lent the funds to the family member.


I would also keep some sort of record of the loan. In case you need to provide it was loan, who to and the conditions. Whether you will be charging interest on the repayments.


We have handy news article called Tax on gifts and inheritances that also outlines criteria for a gift.

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