Private ruling: Gift from family member
Published: July 2011
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you assessable on money gifted to you by a family member? | A1: No.


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 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 legislation does not provide a definition of 'ordinary income' therefore it is necessary to turn to case law. 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 under section 6-5 of the ITAA 1997. A gift received by an individual from his or her parents or other close relatives out of natural love and affection is not assessable income in the individual's hands. Therefore, you are not assessable on money gifted to you by your parent.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: Your parent is selling their residential home and will give you an amount from the proceeds of the sale. | The amount will be made as a once off gift payment in order to help you repay private debts.