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Karen Quagliata Director The name, ‘Accounting and Super’ defines exactly what we do. Our firm is boutique style, meaning we only deal in a specific space, and that is small to medium enterprise and self-managed superannuation.

We are a highly experienced team of accountants and aim to deliver quality, personalised service to our clients. Accounting & Super Townsville Office Level 1, Suite 3, 54 Denham Street Ayr Office 132A Young Street

Gifting. Is it all about them or you? Let’s consider the gift of money to your adult child and their spouse Gifts are generally not considered taxable to neither the person gifting nor the recipient, but can still have consequences for you, perhaps not now but in future. Gifting defined per Department of Human Resources is the value of any assets or transfer for less than their market value. For example, you buy a car for your daughter as a present or more generously sell your daughter your rental property for $150,000, when you purchased it originally for $350,000. While the act of giving can be satisfying and rewarding, it is recommended before you make the gift, that you consider the effect it will have on your financial security. To be sure that the gift will not negatively affect you, particularly in your retirement.

It would be best if you also considered the effect on the recipient. For example, the future is uncertain. As per the case, the gift to the child and child’s spouse may be appreciated; however, you would hope that they are not one of the three marriages that end in divorce. It is likely if the relationship sours, you may see half of your gift form part of a financial divorce settlement. In this situation, seeking legal advice is essential. The guidance may propose that a loan or mortgage agreement is implemented to mitigate the risk of losing the gift via a break-up, by ensuring that the gifted funds are returned to you. Post break up, the funds could then be gifted back to your child. Other examples of gifting include the transfer of your ownership of shares or units in a trust or company, for less than

full market value, as is giving up control of a company or trust. You might gift 10% of your wages donated to your church, forgive a loan from someone who owes you money, payout your child’s business debts, or contribute money to a trust that you do not have control over. These are also considered gifts. If you are receiving government benefits, gifting can affect your payment. Gifts you have made in the past five years may count in your assets and income tests to determine your eligibility for certain benefits. The most you can gift without affecting your payments is labelled the ‘allowable gifting amount’. The threshold for a single person or a couple’s combined gifting amount is $10,000 in one financial year or $30,000 in five fiscal years - this can’t include more than $10,000 in any year.

If exceeded for five years after the gift date, the asset value over the allowable amount will count in your assets test and have deeming applied and included in your income test for qualifying for government benefits. The result may change if the person you gifted to gives the assets back to you from the date they return the gift; however, the rules around gifting are strict, so you need to plan for this properly giving adequate consideration to financial, legal, emotional and health matters for you and your family. DISCLAIMER: The information provided is general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of a qualified advisor before you make any decision regarding any products mentioned. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly Accounting & Super Pty Ltd employees or agents shall not be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

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Profile for DUO Magazine

DUO Issue 156 November | December 2019  

DUO. The Magazine of the North DUO is an elegant, intelligent publication highlighting style, home, fashion, food, travel, culture and exclu...

DUO Issue 156 November | December 2019  

DUO. The Magazine of the North DUO is an elegant, intelligent publication highlighting style, home, fashion, food, travel, culture and exclu...