Private ruling: Income - Gift
Date of advice: 13 August 2015
Published: August 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 01 July 2014

Ruling: Q1: Is the amount you received assessable income? | A1: No.

Relevant facts and circumstances: Your family member transferred you a sum of money. Your family member gave you the money to purchase a home. Your family member has no expectation that you will be repaying the money back to them at a later date.

Relevant legislative provisions: Section 6-5 Income Tax Assessment Act 1997

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that if you are an Australian resident, your assessable income includes ordinary income you derived, directly or indirectly, from all sources, whether in or out of Australia during the income year. Taxation Ruling TR 2005/13 provides the principles relevant to the determination of whether a transfer of money or property constitutes a gift. The ITAA 1997 doesn't define the term 'gift'. Therefore, the word 'gift' takes its ordinary meaning. 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. A personal gift received by you from a third party that is not payment for income-producing activities is not considered assessable income. It is accepted that this payment, from your family member, was for the sole purpose of purchasing a house. Therefore the gift you received is not assessable income.