Smudger82

Hi all,

Any tax gurus on here...? I'm about to get 35,000 GBP from my brother in the UK. The cash will stay in a UK savings account. Does anyone know what my tax liabilities in Australia will be? I.e. will I pay tax on that amount as a whole, or just the interest?

Bermudashorts

Interest only. Receiving a gift is not classified as income, generally gifts can have inheritance tax or CGT implications (in some circumstances) but never income tax implications.

Smudger82

Thanks - it is part of an inheritance, being passed over to me. We have both inherited 35k and he wants me to hold his half, so I will get a cheque for 75k from our solicitor. How would I prove to the ATO that half was an inheritance and half was gifted from my brother?

Bermudashorts

I am sure it would be quite easy to prove where the money came from and what it represents, a letter from the executor, statement of inheritance accounts? But I am not sure that it matters as it is the UK estate that is subject to inheritance tax and that would have been taken before the estate was shared out. If in doubt that, I would suggest a quick consult with a tax accountant, but I think it could be a tax non event so to speak.

Smudger82

Thanks mate - much appreciated!

JAJ

"Hold his half" is an odd way to describe a gift. Is he really giving it to you?

Smudger82

In all honesty, that's no one else's business.

Rambi

No problems with a gift from an Aus point of view but there are limits on gifts in the UK (and those limits are set on the giver not the receiver).

JAJ

You asked the question, but cannot hope for meaningful advice if you are not clear about critical information.

Kooky.

Check your PMs.

Smudger82

Double checked with the ATO, it is just the interest earned on the original amount that is taxable. They accept it as a gift amount and aren't concerned.

Thanks to everyone that gave helpful advice.

Bermudashorts

There are not limits on gifts in UK. There is just a limit on what can be gifted with zero tax implications. If the limit is exceeded then there could be potential future IHT implications, but equally there might not be...

Rambi

Sorry. As we were talking about tax I thought that was obvious I was talking about limits to do with the UK gift tax.

My bad. I always overestimate the ability of people to think about things in context.