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Edited version of your private ruling
Authorisation Number: 1012569985364
Ruling
Subject: tax consequences of a gift
Question
Will you be liable for any income tax or capital gains tax by making a gift of cash to your children?
Answer
No.
This ruling applies for the following period(s)
Year ending 2014
The scheme commences on
1 July 2013
Relevant facts and circumstances
You have been diagnosed with a terminal illness and you children will inherit your estate when you pass away.
Before then, you wish to give each of your children a lump sum cash gift to assist them to buy a house or pay down an existing mortgage.
The money would come primarily from a cash withdrawal from an allocated pension which you hold and is tax free in your hands.
The gifts maybe made:
· via two or three deposits transferred from one of your accounts to your children's accounts
· via a transfer from one of your account to mortgage accounts or real estate agent's trust accounts to benefit your children, or
· via a bank cheque provided by you deposited into mortgage accounts or real estate agent's trust accounts to benefit your children.
Relevant legislative provisions
Income Tax Assessment Act 1997 - Section 6-5
Reasons for decision
As you have stated that the money would come primarily from a cash withdrawal from an allocated pension which you hold and is tax free in your hands, there will be no tax consequences for you as a result of the gift. This is the case regardless of whether the gift is made in one or several transactions or paid to a third party for their benefit.
Please note: if your gift involves the transfer of property, such as shares or land, there may be capital gains tax implications.