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Legal requirements for transferring large sums of money into Australia
What you should know when sending large sums into Australia.
Transferring your life savings ahead of immigrating, funding a business opportunity or inheriting money from family abroad? Whatever your reasons for sending money to Australia, there’s a lot to consider.
You can’t avoid the laws and legal paperwork that go along with transferring large amounts of money, so before you move your money to Australia, familiarise yourself with these laws and regulations.
Do I have to report large transfers into Australia?
You personally won’t have to report any amount of money you transfer out of the Philippines. The bank or money transfer company you use will do this for you. They are required to report any suspicious transfers or transfers over ₱500,000 to the Anti Money Laundering Council.
Services that can help with large transfers to Australia
If you are planning to send a large sum of money to someone in Australia, your recipient could be on the hook for taxes regulated by the Australian Taxation Office (ATO), depending on the reason why you are sending it to them.
The following large money transfers generally aren’t subjected to Australia’s gift tax:
- One-time gift. Money transfers that are seen as one-off gifts or rewards aren’t taxed, but there are instances where they can be. This includes if the gift money is part of a business-like activity or if it’s related to how they earn income. If they decide to invest this gift money, the income it generates can be taxed.
- Inheritance. If your recipient is a beneficiary, they won’t need to pay taxes on the inheritance money received from abroad. If your recipient chose to invest this money, the interest may be taxable and should be reported on their tax.
- Money you bring with you if you’re moving to Australia for the first time. If it’s more than AU$10,000 or a foreign equivalent, you’ll need to declare it to customs.
As long as your recipient attended to any local tax responsibilities in Australia, these kinds of money transfers won’t have any tax requirements.
If you’re sending money for business purposes, including for purchasing goods, receiving advice or counsel or investing in a business, your recipient will have to declare it as foreign income on their yearly tax returns.
In general, one-time gifts or inheritances transferred into the country are not subject to a gift tax. But Australia leaves their tax code vague, stating that “gifts may be taxable if they are large amounts or you receive them as part of a business-like activity.” This allows them to charge taxes if someone tries to pass off a business payment as a gift.
If you’re concerned about a large transfer, speak to a tax professional to make sure that you comply with Australia’s taxation regulations.
What are the penalties for not declaring a large remittance?
If your loved ones in Australia receive a large money transfer that’s not exempt from the gift tax and choose not to pay the tax, they risk fines and other penalties. More serious consequences include criminal convictions and even prison sentences.
Criminal convictions can affect employment and the ability to travel outside the country. Encourage your friends and family to report any large money transfers on their annual tax returns to the Australian Taxation Office. Or ask them to speak to a tax professional for guidance.
What other steps should I take to avoid legal or tax problems?
To avoid the severe penalties that come with a failure to report large sums of money being brought into the country, speak with a professional to guarantee that everything is above board and complies with the laws of all countries involved.
How will my recipient in Australia get the money?
Depending on which transfer provider you use, your recipient can pick up the cash in person or have the money deposited directly into their bank account or mobile wallet.
If they’re picking up the money in person, have them bring a photo ID and transaction or confirmation number with them.
Questions you may have about large transfers
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