Private ruling: Assessable income
Date of advice: 7 November 2024
Published: 16 December 2024
Ruling period: Year ended DD/MM/20YY
Date scheme commenced: DD/MM/20YY

Ruling: Q1: Are gifts of money received by you from a family member 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 gift of money from your family member is not assessable income under section 6-5 of the ITAA 1997.

Relevant facts and circumstances: You and your sibling (Sibling A) provide care and assistance to another sibling (Sibling B). Sibling A receives a carer's payment from Centrelink for care provided for Sibling B. The carer's payment is tax free/exempt as both Sibling A and Sibling B are under age-pension age. You do not receive any Centrelink payments with regard to caring for Sibling B. You have been helping to support and care for Sibling B from before the time Sibling A started to receive the carer's payment. Sibling A chooses to gift you some money each time they receive a payment as a sign of appreciation for the help and assistance you provide for Sibling B. Sibling A can choose to either reduce or stop the gifts of money given to you at any time, and you will continue to provide care for Sibling B as you currently do. There is no written agreement or arrangement in place between you and Sibling A, and no expectation on you to provide a particular amount of time or care for Sibling B.

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