My elderly parents are wanting to gift me a portion of their income every year. From what I have read there is no direct income tax payable on it, but is there a limit to both the amount and frequency of the gift?
To provide context, it will be $500k every year.
Hi @Andy1980
No, there's no income tax payable on gifts from your parents, and there's no limit on the amount or frequency. In Australia, genuine gifts aren't considered assessable income, so you won't need to declare the $500,000 annual gift on your tax return.
We define a gift as a transfer of money or property that's made voluntarily, where the donor doesn't expect anything in return and doesn't materially benefit from it. If the gift from your parents meets these criteria, no tax applies to either you or them.
However, if the gifted money goes on to produce income for you (such as bank interest or investment returns), you'll need to pay tax on that income. The gift itself remains tax-free, but any earnings it generates become part of your assessable income.
If you receive government benefits, you should check with Services Australia, as gifting may affect your payments. For tax purposes, there are no restrictions on the amount or frequency of genuine gifts between family members.
You can read more about this in our tax on gifts and inheritances article.
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