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Overseas relative owes me money

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A relative of ours owes us money. The funds we lent them came from our credit card. Long story short it was meant to be a short term loan, but wasn't. This relative is finally able to pay it back, thank goodness, but as they're in the USA they can't BPAY it directly off our credit card as they don't have BPAY. They have to transfer it to our account, and then we have to pay it off of the credit card. So my question is, will we have to pay tax on this money landing in our account even though it's going straight on the credit card? And will it affect our Centrelink income estimate? I'm worried about this looking like extra income when it's not, as we are really not benefitting from this money at all, they're just paying their debt that essentially we're carrying. Thanks 

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Most helpful response

ATO Certified Response

ATO Community Support

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Hi @QuestionAsker,

 

Generally speaking, small loans and monetary gifts from family members or friends aren't considered as assessable income.

 

In your case it's the repayment of the loan amount which would not be considered as assessable income for tax purposes.

 

You will need to contact Services Australia to get an answer on the (Centrelink) family income estimate.

You can read more here about assessable income for tax purposes.

 

I hope that's helpful.

RichATO

 

1 REPLY 1

Most helpful response

ATO Certified Response

ATO Community Support

Replies 0

Hi @QuestionAsker,

 

Generally speaking, small loans and monetary gifts from family members or friends aren't considered as assessable income.

 

In your case it's the repayment of the loan amount which would not be considered as assessable income for tax purposes.

 

You will need to contact Services Australia to get an answer on the (Centrelink) family income estimate.

You can read more here about assessable income for tax purposes.

 

I hope that's helpful.

RichATO