Ask an Adviser - Gifting Cash and the Family Tax Benefit

Top answer provided by:

Leigh Morris

Hi Nini, 

Thank you for your question.

As long as your mother in law is sending the A$40,000 as a "genuine gift", there is no further tax that you need to pay, in Australia.

The Australian Tax Office (ATO) has no limit on the amount that can be received as a gift but does state, "gifts may be taxable if they are large amounts or you receive them as part of a business-like activity or in relation to your income-earning activities as an employee or contractor." The ATO’s comment relates to ensuring that the amount is a "genuine gift", otherwise the amount should be considered as part of your assessable income for taxation purposes. 

Regarding the Family Tax Benefit (FTB), the Department of Human Services (DHS) considers this "foreign income" and it will be included in your FTB assessment. For this reason, it would be best to make contact with DHS to determine how your FTB would be affected, before receiving the gift from your mother in law. 

I hope this helps answer your question and good luck for the future. 

Regards,

Leigh Morris 
Sydney Financial Planning

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Article by:

Nini from Melbourne

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