Private ruling: Assessable income – gifts
Date of advice: 7 March 2019
Published: May 2019
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the gift from a family member form part of your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. Subsection 6-5(2) of the 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, during the income year. Taxation Ruling TR 2005/13 Income tax: tax deductible gifts - what is a gift provides principles relevant to the determination of whether the receipt of money constitutes a gift. In your situation, you will receive a one-off payment from your sibling which you will use to purchase a house to live in. The payment will be made to you voluntarily and not as a result of any services that you performed. Accordingly the one-off payment that you will receive is not ordinary income and is not to be included in your assessable income.

Relevant facts and circumstances: Your family member will be sending a sum of money as a gift for you to purchase a property in Australia. You will live in the property as your main place of residence. There is no employment relationship between you and your family member. The payment is not in relation to any services provided by you. There is no loan arrangement or repayments for the gifted amount.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 subsection 6-5(2)