Private ruling: Assessable income
Date of advice: 4 March 2025
Published: 14 April 2025
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the gifted amount received by you from your parents considered assessable income under section 6-5 of the Income Tax Assessment Act 1997 ? | A1: No. Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia. Ordinary income is income according to ordinary concepts. Ordinary income has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business. A personal gift received by an individual from family members, not related to any income-producing activity on the part of the individual, is not assessable income. Therefore, the gifted amount from your parents is not assessable income under section 6-5 of the ITAA 1997.

Relevant facts and circumstances: Your parents have sold a house in Australia. They will gift you an amount of money which are some of the proceeds of the sale of the property. The gifted amount is for you to purchase a car and put toward a property. Your parents have provided the ATO with a declaration confirming the amount is a genuine gift. Your parents do not require this amount to be paid back and you are not obligated to do anything in return for the gifted amount.

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