Private ruling: Gift or Assessable income
Date of advice: 30 January 2018
Published: June 2018
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Would an amount of money given to you by your parents be considered assessable income under subsection 6-5 (2) 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, during the income year. A personal gift received by you for personal reasons, where there is no connection between the receipt of the gift and any income-producing activity by you, is not assessable income.

Relevant facts and circumstances: Your parents propose to give you a one off gift of money. This money will be deposited into your mortgage offset account to assist you pay off your mortgage sooner. You do not receive any other income from them or have any business/income producing relationships with them. There are no implied or expressed obligations attached to the gift.

Relevant legislative provisions: Subsection 6-5(2) of the Income Tax Assessment Act 1997