Any limit for gifting cash to children?

[Brenda Irwin]

Is there any limit per annum to gifting cash or shares to my children?
I would like to get some small investing going (even if its just a rollover term deposit) so they have some equity when they get old enough to borrow for themselves.

 

[Shirley]

Brenda - I believe it is $10,000, but should wait for the experts to tell you.

 

[Raddles]

HI there Brenda
I think there are more likely to be limits in other jurisdictions which have gift tax such as the UK
I believe (and am sure the Accountants will correct me if wrong) - you need to consider if you are going to infringe the income tax threshholds for minors - i.e. they earn more than $600 + dollars per year in income (dividends, interest) - and get taxed at the higher rate under our tax system.
Also just remember it may be better to invest in such a way you are still trustees for the children until they are 18, otherwise if property is left to them prior to this - the Public Trustee can potentially be involved in the matter.
I recall my husband was left a car by his grandfather who passed away when he was still a minor - the problems that were created by that gift meant his parents had to deal with the public trustee - he never got to drive the vehicle as it had to be sold to pay the administration costs of the trustee.
thanks

 

[Mry]

Unless the person making the gift is in receipt of a pension (such as the old age pension), there are no limits on gifting. Just be aware that if you gift shares or property, there may be capital gains and/or transaction costs (eg stamp duty).

Gifting income (such as a distribution from a trust) is a different story altogether.

 

[Pushka]

I agree with Mry (not that I am an accountant!) My mother gives my brother and I $10,000 between us each year, but only for 3 years at a time; she receives a pension and so each year this amount is deducted from her assets which means she then earns a slightly higher pension. Otherwise, when she is in need of a nursing home they can take away all but $29,000 of everything she owns, until she dies! She could give us more than $10,000 each year, but then she wouldnt be allowed to deduct it from her assets.

On the other hand, people who are not on a pension can do whatever they like with their personal money.

 

[alexlee]

Unless the person making the gift is in receipt of a pension (such as the old age pension), there are no limits on gifting. Just be aware that if you gift shares or property, there may be capital gains and/or transaction costs (eg stamp duty).

Mry, did this rule get changed recently? I thought there was an old rule limiting gifts to $10k a year.
Alex

 

[chrispy]

I regularly gift money to my son, its my money and as far as I understand I can do what I want with it. I bought him a car for Christmas, I previously paid for his house.

He is my only heir so he may as well get what he needs while I am alive instead of struggling, then getting it all in one lump sum. This way he has been able to return to Uni to get a degree and honours and is now studying for Masters. This also allows him to work part time with the mentally disabled to teach them art, which does not pay well but he thoroughly enjoys.

I think there is some confusion about what you can gift when on a pension as the $10,000 mentioned is the amount that can be gifted without it affecting a pension.

I am not on a pension so I can do what I want. Surely thats what our investing is all about

Chris

 

[Mry]

Mry, did this rule get changed recently? I thought there was an old rule limiting gifts to $10k a year.
Alex

I am not aware of any limit on gifts at all. None.

As stated by others, the only limit I know of is the $10,000 old age pension limit. It will permanently affect your asset base for pension testing purposes if you exceed the limit.

 

[Pushka]

I am not aware of any limit on gifts at all. None.

Sshh, dont tell the Government or we will have levy, or duty slapped in quick smart! The only time a gift might require extra paperwork is in the transfer of ownership of land - stamp duty and all that.

 

[Brenda Irwin]

I am not on a pension so I can do what I want. Surely thats what our investing is all about
Chris

So very true, Amen.

 

[ronnieandkylie]

If it is a cash donation to children there is no limit>

 

[depreciator]

I'll need to tell my mother she can give me as much money as she wants whenever she wants.
Scott

 

[Alex P Keaton]

I regularly gift money to my son, its my money and as far as I understand I can do what I want with it. I bought him a car for Christmas, I previously paid for his house.

Chris

Hiya Chris, how does it work? Could you tell me a little bit more about it.

Originally I was thinking mum and dad were going to use the equity in their house to give me about $50 K and pay it off via a regular mortgage, but now I'm thinking it would be a better way to go if they gifted this money to me in one big lump sum so I can put their 50 K gift (which i understand is a loan gift)? and my 30K that I have saved towards a deposit. They also have given each child 15K to use for wedding, house deposit whatever.

So I could have 100 K deposit and my own mortgage of 100-150K that I'll use to buy first home which will be an IP apartment in the innner city perth.


Thanks everyone here, I have learnt heaps, since i started lurking a few weeks ago. You guys are great