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Overseas parent saving account in Australia tax enquiry

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Newbie

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Replies 1

Hi there,

 

My parents (from overseas) opened an Australian bank account when they were visiting, and transferred 50k into the account.

Now my friend is in need of some money for a car he's borrowing from my parents (as this is cheaper) and they have a written agreement, with a 5% annual interest on it.

 

Do my parents need to pay tax on this 5% interest (which is roughly 2.5k/year)? if so, how much tax do they need to pay?

 

Thanks

Bruce

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Most helpful response

Devotee

Replies 0

I think you are saying your friend has borrowed money from your parents and they are charging him interest? Yes this is considered Australian sources income and it would be taxable. Any bank interest they earn on that account is taxable too
1 REPLY 1

Most helpful response

Devotee

Replies 0

I think you are saying your friend has borrowed money from your parents and they are charging him interest? Yes this is considered Australian sources income and it would be taxable. Any bank interest they earn on that account is taxable too