Do cash gifts count as taxable income? Gifting money in Australia
Key Points
- Genuine cash gifts in Australia are completely tax-free, no matter the size.
- If you're on Centrelink or a pension, cash gifts may affect your payments.
- The rules are different if gifting assets like property or shares instead of cash.
Cash gifts are the best gifts: it is known.
But does the money you’ve received as a gift (or given away yourself) count as taxable income in Australia? Do you have to declare cash gifts when filing your taxes in Australia, or let Centrelink know?
Let’s unwrap what you need to know about giving money in Australia.
Always consult a tax professional for advice on what should be reported for tax purposes.
What counts as a gift? Taxable income and money explained
The Australian Tax Office (ATO) defines a gift as a transfer of money, assets, or property that meets the following conditions:
- The transfer is voluntary.
- The giver doesn’t receive (or expect to receive) anything in return.
- The giver doesn’t materially benefit from the gift.
This is quite a generous definition and can cover a wide variety of gifts, especially financial ones. An example of gifting money according to the ATO could include everything from birthday presents to home loan deposits.
Do gifts of money count as taxable income in Australia?
In short? No. According to the Australian Taxation Office, gifts of money from relatives and friends (even from overseas) do not count as assessable income and therefore don’t have to be declared by the giver or receiver when filing their tax returns – regardless of the amount.
There are a few caveats, however. A gift isn't taxable income so long as:
- The money is a genuine gift, and the recipient is not expected to give anything in return.
- The gift isn’t related to any of the recipient's income-producing activities.
- The gift is sourced from the giver’s own funds in their name.
For example, if your parents give you $500, but they expect you to do their dishes, and you work as a freelance dishwasher, this doesn’t count as a true gift and could be taxable by the ATO.
Additionally, you will need to report any income you earn on the money gift in your tax return. Common examples of this include any interest earned in a savings account or returns from investment shares.
It’s also worth noting that the rules are different if you’re giving someone assets instead of cash. For instance, if you give someone a house instead of a mere housing deposit, this is considered a sale in the eyes of the ATO and thus liable to capital gains tax (CGT).
Similarly, intangible assets like shares or cryptocurrencies could incur CGT if you give them as a gift.
However, if you receive or inherit assets as a gift, they’re only taxable if you earn any income from them or choose to dispose of them later (in which case, you would declare it on your tax return).
Do I need to declare gift money to Centrelink?
Giving cash gifts could be a pretty big tax loophole, especially if you’re already receiving government benefits through Centrelink. But fear not: the crafty ATO are one step ahead of us.
If you’re receiving a Centrelink payment, such as JobSeeker, Age Pensioner, or Youth Allowance, you will need to declare any cash or monetary gifts received or given within 14 days.
If the amount falls within the free allowable gift limits, it will not affect your payment.
However, if it falls outside the gifting limits, it may impact your payments, especially if you're earning income on the gift such as deposit interest.
How much money can be gifted tax free in Australia?
In Australia, the allowable gift limits for money are:
- $10,000 per financial year.
- $30,000 over a rolling period of five financial years (provided in any one particular year out of the five, the gift amount doesn’t exceed $10,000).
The gift limits apply to either a single person or a couple acting as a legal entity, for both giving and receiving money domestically or from overseas. So long as the gift meets the gift limits and other requirements, it falls within ‘allowable disposable income’ and therefore does not need to be declared to Centrelink or the ATO.
If a gift exceeds those limits, however, the excess will be assessed as a deprived asset. A deprived asset is an asset, income, or source of income that has been deliberately diminished or destroyed in value. Examples of deprived assets include selling your car or hiding income by giving it to a spouse or family member as a gift. (It goes without saying, however: don’t commit tax fraud).
Some people choose to give money within the gift limits as a way of improving their payments, though depending on your circumstances this mightn’t always work.
For example, a pensioner gives their child $10,000 one year in order to reduce their assets and thus boost their pension income. However, Centrelink may regard the pensioner’s assets as largely unchanged in value, and therefore would neither lift (or reduce) their amount of pension.
Additionally, if the pensioner gives more than the allowable gift limits, the excess will be asset and income tested by Centrelink for five years from the gift date, which would likely negatively affect their payments in the future.
Maybe just let a gift be a gift, eh?
Explore our family finances hub for more quick tax guides. Compare high interest savings accounts to stash your money gifts in the table below.
Compare high interest savings accounts
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Savings Account
5.35% p.a. (for $0 to $250,000)
4.75% p.a.(for $0 to $1,000,000)
Yes up to $250,000
Bonus variable rate is available for the first 4 months.
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first 4 months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Savings Account
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Mozo experts choice awards won:
- High Interest Savings - 2024
Savings Maximiser
5.50% p.a. (for $0 to $100,000)
0.55% p.a.(for $0 and over)
Yes up to $250,000
Deposit $1,000 into a personal ING account, make 5 eligible transactions with a linked Orange Everyday account and grow the balance each month.
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Maximiser
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 5.50% p.a. (for $0 to $100,000)
- standard interest rate
- 0.55% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must be linked to an Orange Everyday transaction account to receive the bonus rate. Where multiple Savings Maximiser Accounts are held, the bonus rate is only applied to one nominated account.
Read our Mozo Review to learn more about the Savings Maximiser
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Bonus Saver
5.00% p.a. (for $0 and over)
1.00% p.a.(for $0 and over)
Yes up to $250,000
Bonus interest for the first four months from the account opened date. No minimum balance required. No monthly or ongoing fees or withdrawal penalties. Manage your money easily via phone or online banking or via the BCU Bank app.
CompareCompareBonus Saver
Bonus interest for the first four months from the account opened date. No minimum balance required. No monthly or ongoing fees or withdrawal penalties. Manage your money easily via phone or online banking or via the BCU Bank app.
- Maximum rate
- 5.00% p.a. (for $0 and over)
- standard interest rate
- 1.00% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the Bonus Saver
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MoneyMAX Account
No Current Offer
4.70% p.a.(for $1 and over)
Yes up to $250,000
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
CompareCompareMoneyMAX Account
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
- Maximum rate
- No Current Offer
- standard interest rate
- 4.70% p.a.(for $1 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- n/a
- Access
- BPay, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Branch access for deposits only.
Read our Mozo Review to learn more about the MoneyMAX Account
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Savings Accelerator
3.55% p.a. (for $0 to $50,000)
2.85% p.a.(for $0 to $50,000)
Yes up to $250,000
New customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Accelerator
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 3.55% p.a. (for $0 to $50,000)
- standard interest rate
- 2.85% p.a.(for $0 to $50,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- New ING personal savings customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000. Reverts to variable ongoing rate.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Savings Accelerator
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^See information about the Mozo Experts Choice Savings Account Awards
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