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Gifting assets to family members

Superannuation  |  7/08/2017  |   4 min read

Whether it’s helping a family member get into the property market, funding your grandkids education, or paying for a wedding, sharing your wealth with friends and family is a common goal for retirees. But there are tax and superannuation considerations you need to keep in mind.

If you’re giving away or transferring your assets to another person for less than market value it’s known as gifting. This is important, because it can impact your Age Pension entitlements.

The new rules

Centrelink changed the rules around gifting on January 1 2017. The new measures state:

  • A single person (or couple) can gift up to $10,000 per financial year
  • If the total gifted in a financial year is more than $10,000, the excess amount will be assessed as a deprived asset. More on this in a moment.
  • A maximum of $30,000 can be gifted over a rolling period of 5 financial years, but must not exceed $10,000 in any 1 year.

In other words, there are limits to what you can give away below market value. If you go above these thresholds the assets will still appear in your name for tax and income purposes. These are known as deprived assets.

The updated rules were introduced to prevent people from artificially lowering their asset base in order to claim government entitlements such as the Age Pension, while sitting on several properties (for instance).

Looking after the family

None of the above stops you from legally transferring ownership to a family member or friend, it simply means you can’t do so in order to claim a tax advantage, or other entitlements you might not qualify for.

If you do want to gift an asset, your best course of action is to speak with a financial planner. They can help you understand your options, ways in which you can reduce your assets, and what this will mean for your bottomline.

 

Speak to an Equip financial planner about your assets and how they impact your Age pension entitlements. Book an appointment online or call 1800 065 753.

 

This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the relevant Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance. Issued by Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383. MySuper Authorisation Numbers 33813823017672 and 33813823017518  (‘Equip’, ‘the Fund’ and ‘the Equip Rio Tinto Fund’).

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