Announcements
What's the right super fund for you? Although super may not be on the top of your list now, keeping track of your super can help maximise your savings for when you retire. Try out the new YourSuper comparison tool and choose a super fund that meets your needs. Still got questions about super? Ask the Community
Started ‎23 June 2021 by
Modified ‎23 June 2021 by

In Australia, gifts and inheritances are generally not considered as income and don’t require you to pay any Australian taxes.

However, there are some occasions where tax may be payable or capital gains tax (CGT) may apply.

We define a gift with the following criteria:

  • there is a transfer of money or property
  • the transfer is made voluntarily
  • the donor does not expect anything in return
  • the donor does not materially benefit.

My parents want to give me money – do I have to pay tax on it?

No, gift money does not form part of your assessable income and you don’t have to declare it, regardless of the amount.

We understand family or friends might give you money to put towards a home deposit or to help you out with everyday living or study expenses.  However, if that money goes on to produce income for you, for example bank interest, then this will become part of your assessable income.

A family member living overseas wants to give me money as a gift. Do I pay Australian tax on it?

No.  A gift from a foreign resident for tax purposes, whether it’s money or an asset, is treated the same as a gift from someone who is an Australian resident for tax purposes.  If that money or asset goes on to produce income for you once you own it, then you’ll pay tax on that income.

Do I pay tax if I gift someone money or an asset, like a house?

Money

If you gift money to a friend or family member there are no tax implications for you or the receiver.

Assets

If you gift someone an asset like a house, we consider that transaction to be the same as you selling the house, and capital gains tax (CGT) will apply.  If you’re entitled to the CGT main residence exemption, it still applies.  If you’re not entitled to the CGT main residence exemption, or are only entitled to a partial exemption, you’ll be liable for CGT.

I receive government benefits – will gifting money to someone impact my payments?

Giving away money or assets may affect you or the gift recipient if either of you receive government benefits.  For more information, we encourage you to check out the Services Australia's 'gifting' topic on their website.

How are other gifts like cryptocurrency or shares taxed?

Shares and cryptocurrency are known as capital assets, just like property.

If you’ve been gifted shares or cryptocurrency, you:

  • only pay tax on any income produced by the shares or cryptocurrency
  • may be liable for CGT when/if you dispose of the shares or cryptocurrency later.

If you’ve gifted someone shares or cryptocurrency, you may be liable for CGT since you’ve disposed of a capital asset.

If you inherit shares or cryptocurrency, you:

  • don’t pay tax at the time of receiving them 
  • are liable to pay tax on any income produced by them 
  • may be liable for CGT when/if you dispose of the shares or cryptocurrency later. 

You can find out more about the CGT consequences of disposing of capital assets on our webpage CGT assets and exemptions.

I’ve received an inheritance from a deceased estate – do I have to declare it?

No. Generally, as the beneficiary of a deceased estate, if you inherit money or assets such as property or jewellery, you don’t have to declare it unless: 

However, once you own the inheritance, you’ll pay tax on any income earned by it, for example bank interest or rental income.  You may also be liable for capital gains tax if you dispose of an inherited asset later. 

If the inheritance you receive is super from the deceased’s super fund, it’s called a super death benefit.  The super fund trustee will inform you if tax is payable, and if it is the tax will be deducted from the super death benefit.

You can read more here if you’re the beneficiary of a deceased estate.

Can't find the answer to your question here?

Read more about capital gains tax and amounts you don’t include as income.  If you’re still not sure, ask the community.

 

Labels (1)
Contributors
0 Likes