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Re: Money gift from a parent

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Hi, my dad is able to give me $90,000 as he has had a super insurance pay out. Will ither of us have to pay any tax
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Hi @A-Haz,

 

Thanks for your question!

 

The amount of tax your dad may be liable for depends on a number of factors, which can include his age and the reason for the lump sum payment.

 

If he has received a PAYG payment summary - superannuation lump sum, it will need to be reported on section 8 of the tax return. The taxable component and tax withheld should be outlined on that payment summary. The tax implications will vary depending on whether or not he has reached preservation age.

 

On the other hand, if the payment was made for an income protection policy or sickness or accident protection policy, then this may need to be reported on Section 1 of the tax return. He should receive a payment summary for this amount as well, which will also show any amounts of tax withheld.

 

If he has received compensation as a lump sum payment after settling a personal injury claim and has received a structured settlement, this may impact his tax liabilities as well.

 

Generally speaking, amounts you receive as gifts are not usually treated as income. However, if you invest the money your father gives you, you will have to pay tax on any interest or other earnings on that income.

 

Hope this helps,

 

Rachael B

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Highlighted

Best answer

ATO Certified

TaxTime Support

Replies 0

Hi @A-Haz,

 

Thanks for your question!

 

The amount of tax your dad may be liable for depends on a number of factors, which can include his age and the reason for the lump sum payment.

 

If he has received a PAYG payment summary - superannuation lump sum, it will need to be reported on section 8 of the tax return. The taxable component and tax withheld should be outlined on that payment summary. The tax implications will vary depending on whether or not he has reached preservation age.

 

On the other hand, if the payment was made for an income protection policy or sickness or accident protection policy, then this may need to be reported on Section 1 of the tax return. He should receive a payment summary for this amount as well, which will also show any amounts of tax withheld.

 

If he has received compensation as a lump sum payment after settling a personal injury claim and has received a structured settlement, this may impact his tax liabilities as well.

 

Generally speaking, amounts you receive as gifts are not usually treated as income. However, if you invest the money your father gives you, you will have to pay tax on any interest or other earnings on that income.

 

Hope this helps,

 

Rachael B

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