Tax free gift, between family members?

I've heard of this however, do not know how it works!

Has anyone had anything to do with this? I just got off the phone with my dad, and mentioned that i'd like to buy a house soon, and (you guessed it) he could send some coin my way.

What is the limit that he can legally give me, tax-free? Is there a limit?

Is this a shady way to reduce his assets? (super) His main concern is apply for pension when he turns 65, and being questioned about "oh, where di $50k go in 2010"? Is this a general practice between family members, or unheard of, etc..

Anyone dealt with this situation before?

Thanks!

 

Centrelink gifting rules attached. There is no 'gifting tax' or limits in Australia. It only impacts on Age pension eligibility.

Anything more than $30k gifted in the 5 years before you old man applies for the pension will be picked up.

If he gifts $50k, then $20k will still be included in his asset test for his pension when he applies.

It may not be an issue.

Check the Centrelink website and work out whether it will effect his situation (a bit of guess work if it is a few years down the track).

If it does mean his pension is reduced by $X per year for his first couple of years on the pension you may just be able to subsidise him by that amount - it will not be much I would say.

Crunch the numbers and see what happens.

Also, if you are thinking that Centrelink won't pick it up - guess what, they will! I have seen it happen - luckily it didn't impact the age pension eligibility of the people involved in that case.

Possible to increase pension eligibility if he has an SMSF via pushing some of the income generated in a reserve account - especially if his shares (if applicable) have a good year. Technically a reserve within an SMSF doesn't belong to any member - so Centrelink shouldn't be able to include it as part of the persons assets - but they do try!

Caution - soapbox ahead:
It is weird - I have met some people, who always seem to be from country areas, that are fanatical about spending all their hard earned superannuation savings as soon as they can access them so they can get a crappy little aged pension from the government - they have this sense of entitlement that the government has to look after them! Get real - why sacrifice all that money for $13k per year? I don't see the logic.
Soapbox now completed

Since you brought the subject up, could your old man lend me a quiet $50k also?

Joking

SM

 

Thanks for the info! Just what i needed.