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Paying my sister

Discussion in 'Accounting, Tax & Legal' started by Tommy01012017, 3rd Mar, 2017.

  1. Tommy01012017

    Tommy01012017 New Member

    Joined:
    3rd Mar, 2017
    Posts:
    3
    Location:
    QLD Australia
    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?
     
    twisted strategies likes this.
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,778
    Location:
    Sydney, Australia
    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.
     
  3. Tommy01012017

    Tommy01012017 New Member

    Joined:
    3rd Mar, 2017
    Posts:
    3
    Location:
    QLD Australia
    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?
     
    twisted strategies likes this.
  4. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    871
    Location:
    Sydney
    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.