Good morning, I'm a new member and don't know how to create my new post. My question is: I am AUS citizen working in Australia. If I earned $45000 AUD this year, can I pay $18200 to my sister like English lesson as a reward to improve my job’s skill. Then, my income will reduce to $26800 and pay less tax. I don't want to use gift for reason. There are some gift rules in ATO(No more $10000 gift in 1 year, No more than $30000 in 5 years). How can I prove her money is taxable and my money can deductible?
Generally, self-education expenses are only deductible if they directly relate to your current employment. Education to improve your employability would not be a deductible expense. I think you'd have a difficult time convincing the ATO that your payment to your sister was genuine unless she was already operating a business teaching English (and you weren't her only client), or if you were operating a business and she was a genuine employee.
Thank you Simon. I'm working in Australian company and that English lesson is for improving my communication skills to work better. I know is hard to convince ATO. I was thinking to hire my sister to pay under her TFN. If I pay under TFN, then I have to pay super for her. That's not a good way. How about I pay $18200 under my sister ABN. Is that a better way?
No you can't claim costs for English lessons as it doesn't relate to the production of income. Even if you could claim paying half of you wage to a related party would fail.
