Hi,
Being relatively new too Australia and the tax laws, I have got a quick question with regards to receiving cash from family / friends and the tax implications.
For example if my mother wanted to give me $10,000 in cash (I wish !) as a gift or present, then would I be liable to any sort of tax?
Thanks in advance
Rob
Hi Rob,
No, a gift of money (10K) is tax exempt.
This was what I was told athough it was about 5 years ago. I’m sure updated info will probably be forthcoming if I’m wrong [
]Cheers
Sooshie []“small steps make the journey” (SAS)
Thanks Sooshie,
I was hoping that was going to be the case. Only reason I ask is because what I was thinking about doing is setting up a family trust.
Each year the income is distributed to my mum, who pays the least amount of tax. Instead of her loaning the money back to the trust, and the trust owing her, she just gives it back to me as a gift and I loan it back to the trust?
I was just wondering the legality of it? Btw my mum lives over-seas so it would only be subject to 10% withholding tax here in OZ as I am led to believe. Of course she would have to pay tax in her country, but that is minimal. Is all this legal?
Cheers
Rob
Hi Rob,
Make sure you have another reason for setting up a family trust other than to save tax – the ATO scrutinises people who don’t appear to have any other reason for it.
Maybe a better idea would be to distribute some of the trust’s income to yourself as well.
-Nick
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