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Re: money from relative overseas to help buy a house

Newbie

Views 741

Replies 2

Please help me clarify on the gift topic!

 

My close relative(grandma) who lives overseas wants to help me by giving me a large sum of money approximate 1 mil00) to purchase a home in Australia.

Will I have to pay tax when I receive the fund which will be transferred into my bank account.

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 0

Hi

 

Welcome to ATO Community.

 

Generally speaking, a personal gift received by you for personal reasons, where there is no connection between the receipt of the gift and any income-producing activity by you, is not assessable income.

 

Taxation Ruling TR 2005/13 provides principles relevant to the determination of whether the receipt of money constitutes a gift. This ruling highlights that rather than attempting to define a ‘gift’, the courts have described a gift as having the following characteristics and features:

  • there is a transfer of the beneficial interest in property,
  • the transfer is made voluntarily,
  • the transfer arises by way of benefaction, and
  • no material benefit or advantage is received by the giver by way of return.

You'll need to keep records stating the loan is a gift and any interest you earn on the money in an Australian bank account will be subject to tax and may be prefilled in myTax.


You can find more information about income you must declare on our website, or if you have further questions you can phone us  speak with an specialist.

 

Thanks

JoA

2 REPLIES 2

Most helpful response

Former Community Support

Replies 0

Hi

 

Welcome to ATO Community.

 

Generally speaking, a personal gift received by you for personal reasons, where there is no connection between the receipt of the gift and any income-producing activity by you, is not assessable income.

 

Taxation Ruling TR 2005/13 provides principles relevant to the determination of whether the receipt of money constitutes a gift. This ruling highlights that rather than attempting to define a ‘gift’, the courts have described a gift as having the following characteristics and features:

  • there is a transfer of the beneficial interest in property,
  • the transfer is made voluntarily,
  • the transfer arises by way of benefaction, and
  • no material benefit or advantage is received by the giver by way of return.

You'll need to keep records stating the loan is a gift and any interest you earn on the money in an Australian bank account will be subject to tax and may be prefilled in myTax.


You can find more information about income you must declare on our website, or if you have further questions you can phone us  speak with an specialist.

 

Thanks

JoA

Devotee

Replies 0

No tax on gifts (of money) from relatives but you should ensure you have the documents to prove it is from your grandma and not foreign sourced income or a loan.