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Cash gift

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My parents are coming to australia and would like to bring a cash gift with them of $20k+ to give it to me. What kind of documentation they need to provide to show the source of the money? Invoices or what?

 

Thanks

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Hi @alexmartinez

 

Thanks for your question. Thanks too to both @Anonymous and @BeFree  for their input into this as well.

 

Simply put though this weblink should help. Go to the heading Other amounts that are not taxable. This should clarify that yes a genuine cash gift is not taxable.  However as discussed above records as to the source are always good to have lest any Government agency require proof as to the validity of the gift.

 

Thanks again

MarkA

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Enthusiast

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This probably isn’t really a question for the ATO. The ATO will only be able to tell you if you need to pay tax on money you receive, they can’t comment on what documentation your parents might need to provide to bring the money into Australia.

Generally speaking, a cash gift from a family member that is not a source of income is not taxable. Here is information on a website that might help you: https://alignfinancial.com.au/2018/06/06/are-gifts-taxable/.

You might want to try Austrac website for the other part of your question.

https://www.austrac.gov.au/individuals/travelling-and-australia-money

Anonymous

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Hi @alexmartinez 

 

You need to be aware that this is a taxation related question, even though it may also involve AUSTRAC / CUSTOMS when your parents initially arrive in Australia and have to make a declaration.

 

Also, you generally take a larger risk when you rely on information from third party sites because you simply do not know if they have the expertise or knowledge base, and that is why it is best to go to the ATO website first and foremost.

 

This type of issue has been addressed a number of times before on this forum.  https://community.ato.gov.au/t5/Personal-tax-questions/receiving-gift-from-overseas/td-p/3458

 

Its always good to be able to demonstrate where any large amount of funds have come from because AUSTRAC shares information with other government agencies such as the ATO. 

 

If the ATO were to act on the information provided to them by AUSTRAC by conducting an audit of your taxation affairs you would have to be able to demonstrate that these funds were in fact a gift and in the absence of any evidence the ATO can deem the funds income in your hands and tax you on it.    

 

There has been a large crackdown on money laundering such as undeclared income been disguised as gifts to the extent that the ATO work collabratively with other agencies such as Federal Police and the Australian Institute of Criminology to try and stamp it out.  

 

The taxation laws put the onus squarely on a taxpayer to demonstrate that what they are saying is true under the " onus of proof " provisions.

 

So If I had parents coming into the country to give me a large monetary gift I would get as much evidence as possible to demonstrate that it was a genuine gift.  Evidence such as bank account statements that clearly show not only where the funds come from, but that my parents had these funds accumulate in that account over a period of time from their earnings.   

 

If you simply provide one bank statement that shows little history then it draws the question of where did your parents get the funds from, and if they can not demonstate where the funds came from then the spotlight is also cast on them as well as yourself.  This is when it gets really messy as you could both find yourselves been questioned by Australian and overseas authorities, and it could cost you both a lot.

 

Have a read of this ATO website page  website page.

 

Hope this helps.

 

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Taxicorn

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Most helpful response

ATO Certified Response

ATO Community Support

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Hi @alexmartinez

 

Thanks for your question. Thanks too to both @Anonymous and @BeFree  for their input into this as well.

 

Simply put though this weblink should help. Go to the heading Other amounts that are not taxable. This should clarify that yes a genuine cash gift is not taxable.  However as discussed above records as to the source are always good to have lest any Government agency require proof as to the validity of the gift.

 

Thanks again

MarkA