# General taxation question



## SamLau (8 September 2009)

Hey yall,

Hows it going?  

I might come into come cash from my parents which i will put to buying more shares.  My question IS.....

If I get given cash (deposited to my bank account) from my parents will I need to pay any tax on it? Will it trigger anything to the ATO?

I heard from someone that $20,000 deposits alerts the ATO.

Thanks in advance


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## Amor_Fati (8 September 2009)

I would think it is not taxable because it is not income, just a transfer of post-tax income. 

I know there is a body AUSTRAC that monitors large cash transactions to control money laundering and terrorist financing activities but this is nothing to worry about if you are legit! I think they are more concerned with large physical cash withdrawals/deposits than electronic deposits as the cash cannot be traced.

Not advice etc.


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## stocksontheblock (8 September 2009)

SamLau said:


> Hey yall,
> 
> Hows it going?
> 
> ...




No, there are no taxes on this at all. Only the usual if you start earning interest etc. Its yours to do with as you wish.

As for the $20k. This is a myth. They do look at transactions which may appear odd. Its just that large transfer's are the ones that stick out the most.


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## Amor_Fati (8 September 2009)

stocksontheblock said:


> No, there are no taxes on this at all. Only the usual if you start earning interest etc. Its yours to do with as you wish.
> 
> As for the $20k. This is a myth. They do look at transactions which may appear odd. Its just that large transfer's are the ones that stick out the most.




AUSTRAC must be notified of any transactions involving over $10k in notes and coins, under the Financial Transactions Reporting Act. AUSTRAC can then pass it on to the ATO, AFP or any other acroynm  I noticed the bank teller doing extra things when I withdrew $14k cash once (to avoid the $8 bank cheque fee). I was a bit nervous!


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## jono1887 (10 September 2009)

Amor_Fati said:


> AUSTRAC must be notified of any transactions involving over $10k in notes and coins, under the Financial Transactions Reporting Act. AUSTRAC can then pass it on to the ATO, AFP or any other acroynm  I noticed the bank teller doing extra things when I withdrew $14k cash once (to avoid the $8 bank cheque fee). I was a bit nervous!




im sure one off transactions dont get flagged. Its probably multiple transactions above the threshold level. I doubt they really have the time to check out all cash withdrawals above 10k.


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## Krusty the Klown (11 September 2009)

jono1887 said:


> im sure one off transactions dont get flagged. Its probably multiple transactions above the threshold level. I doubt they really have the time to check out all cash withdrawals above 10k.




Its every cash transaction over $10K, whether its a bank, foreign exchange, pawn shops etc. Any cash handlers have to do it.

I used to work in a retail bank, and any cash transaction over $10K, we had to fill out a report and send it to Austrac.

Its usually done automatically by the computer systems these days though.

Even the TAB have to do it.


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## awg (11 September 2009)

No tax implications for you.

If your parents are pensioners their would be some implications under the "gifting provisions" of Centrelink.

otherwise nothing, as the money is post tax..ie they have paid tax on it already.

the cash transaction reporting is nothing to worry about, (unless you do it all the time)...its mainly so the ATO etc can keep a tab on money launderers, drug dealers, tax dodgers and so on.


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## jono1887 (11 September 2009)

Krusty the Klown said:


> Its every cash transaction over $10K, whether its a bank, foreign exchange, pawn shops etc. Any cash handlers have to do it.
> 
> I used to work in a retail bank, and any cash transaction over $10K, we had to fill out a report and send it to Austrac.
> 
> ...




wow.. how inefficient. whats the point in this? are 10k cash transactions really that rare?


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## Krusty the Klown (12 September 2009)

jono1887 said:


> wow.. how inefficient. whats the point in this? are 10k cash transactions really that rare?




Its to try and track and link up money laundering operations and terrorist financing. I know it sounds silly but its definitely real.

If you think about the size of the South American drug cartels - their operations are global. So they shift funds through networks of banks around the globe, including here, to try and clean/launder it.

Who would suspect hundreds of millions of dollars of drug money being in little old Australia? That's why it would be a good idea - no-one will suspect it.

These transactions are shared with Interpol and foreign goverments.

I heard an estimate recently that the drug trade is the second largest global export commodity behind oil - definitely big business.

When I was in the bank - a head office employee turned out to be a member of an Asian organised crime syndicate -who was placed there because they had no criminal record. It was their job to try and find weaknesses in the bank's systems to enact fraud and money laundering.

And yes, cash transactions over $10K are rare for individuals, business deposits are quite common, but now its electronically reported, so its quite easy. 

There are still manual Austrac reports for what is considered to be a "suspect" transaction by the cash dealer.


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## jono1887 (13 September 2009)

Krusty the Klown said:


> Its to try and track and link up money laundering operations and terrorist financing. I know it sounds silly but its definitely real.
> 
> If you think about the size of the South American drug cartels - their operations are global. So they shift funds through networks of banks around the globe, including here, to try and clean/launder it.
> 
> ...




So i assume that they track movements for individuals and not businesses as they are much rarer for individuals? and if this is the case, what is stopping them from withdrawing in smaller amounts like 9k??


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## Amor_Fati (13 September 2009)

jono1887 said:


> So i assume that they track movements for individuals and not businesses as they are much rarer for individuals? and if this is the case, what is stopping them from withdrawing in smaller amounts like 9k??




It is an offence to delibrately split transactions to remain below the limit. I think an investment banker was imprisoned for doing this as part of an insider trading operation. I think it is for everyone, they are all reported and it is up to Austrac to analyse them.


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## jono1887 (13 September 2009)

An offense to withdrawal your money in smaller amounts? 
What if they proved that they legitimately needed money in 9k packets :


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