Private ruling: Receipt of gift from family member
Date of advice: 6 November 2018
Published: February 2019
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Is the gift of money from a family member assessable income to you? | A1: No.

Relevant facts and circumstances: 1. You are a resident of Australia. 2. An overseas member of your family wishes to gift money to you. 3. A letter from your family member describes the gift as ‘one of love and affection and purely a generous gift from one person to another’.

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

Reasons for decision: Summary: 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. The letter from your relative confirms that the payment to you is not income for personal services, income from property, or the carrying of 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 gift of money from your father is not assessable income under section 6-5 of the ITAA 1997. | Detailed Reasoning - Additional information: If you receive a gift from overseas you would not be in breach of any taxation rules. However, you should seek advice from the Australian Customs Service and Austrac for specific requirements concerning the transfer of cash from overseas.