Gifting rules: when do they apply?

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Mal’s mother would like to gift her sons a substantial amount of money. Although she doesn’t receive an Age Pension, is she free to give away as much as she wants?

Q. Mal

My mother sold her house after my father passed and elected to live with me and my wife. My wife is her carer.

My mother invested her funds, with her three sons as beneficiaries and, as this is a substantial amount, she no longer receives any Age Pension.

As she now has no links to Centrelink, she wishes to give some of her money to her three sons. She gifted $10,000 late last year to us – $3300 each.

Can she give us more now, say $50,000 split amongst us, without being penalised by any authority?

A. As your mother does not receive an Age Pension, then she can essentially gift as much as she likes. However, should her circumstances change and she is in a position to again apply for an Age Pension, the amount gifted will be subject to the gifting rules.

Also, if your mother should have to enter aged care and is looking to have her place funded by the Government, she will be subject to an income and asset test, and any money gifted in the five years prior to her assessment will be considered as part of the gifting rules.

You may also wish to have your mother’s accountant or financial advisor review her finances and provide relevant taxation and investment advice.

RELATED LINKS

Clarification on gifting

Paula wants to know if paying for a family member's surgery is considered gifting.

Can you avoid gifting rules by making will bequeaths?

Does Centrelink gifting apply to will bequeaths?

Written by Debbie McTaggart



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