March 2019

Do I Have To Pay Tax On Money Gifted To Me By My Grandmother?

Do I Have To Pay Tax On Money Gifted To Me By My Grandmother? 1

Hi I’m Tubby, My grandmother sold her property and gifted unconditionally $150000 to me to buy a house. Question, am I required to pay tax on the amount?

From Tubby in Vic

 

Hi Tubby,
The short answer to your question is no, you are not required to pay tax on the gift from your Grandmother!
However from Grandma’s perspective, there may be some tax considerations she should be aware of. Assuming she sold her owner occupied home (principle place of residence) there would be no tax payable. However for Centrelink purposes, if she was receiving the aged pension she would have exceeded the gifting limit of $10,000 per year (maximum $30,000 over 5 years) by $140,000, and that amount would be treated as an asset and subject to the current deeming rules.
In that regard, I would recommend she seeks advice from a registered tax accountant for more accurate advice, and also a financial adviser for some strategies regarding investments and the impact it may have on her Centrelink pension (assuming she is a pensioner!).
Best wishes and happy house hunting!

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by Steve Luman AFP, TPB, ADFP

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