Legal and tax requirements for transferring large sums of money into Australia
Here’s what you need to know about Australian money transfer regulations for large sums of money.
Key takeaways
- Your bank or money transfer provider reports every transfer into Australia to AUSTRAC, whatever the amount - there is no $10,000 threshold and you file nothing yourself.
- Tax liability depends on the transfer's source like property sales or business income versus gifts or inheritance.
- Always keep detailed records and consult a tax professional to ensure compliance for large transfers.
You can't avoid the laws and legal paperwork that go along with transferring large amounts of money. So before you move your cash into Australia, familiarise yourself with these laws and regulations.
Do I have to report large transfers into Australia?
Not if you use a bank or money transfer provider, as they will handle the reporting for you. You'll only need to report it yourself if you bring or post AUD$10,000 or more in physical cash, or move money without going through a bank or transfer business.
The Australian bank or money transfer business that receives the transfer must lodge an international funds transfer report with the Australian Transaction Reports and Analysis Centre (AUSTRAC) within 10 business days, and it does this for every transfer regardless of value - there is no $10,000 threshold. This is to help reduce the risk of money laundering or terrorism financing.
Any amount of money transferred into Australia as international funds transfer instruction (IFTI) must have an IFTI report submitted within 10 business days. Both the sending and receiving providers will need to have verified who you are, and for large amounts they may ask where the money came from. Some providers may also ask for extra documents on larger transfers as part of their own checks, but this doesn't change the reporting rules.
Tax implications of large money transfers
Beyond the reporting your provider handles with AUSTRAC, you'll also need to be aware of any tax implications of someone sending a large amount of money to you in Australia. Whether you need to pay tax depends on what the money is – for example, income, profit from a sale or a gift – and on your tax residency status, rather than on the transfer itself.
When might I need to pay taxes?
Whether or not you need to pay tax on money transferred from abroad will depend on the source of the funds. To help you out, we've broken these down into when a transfer is a taxable event and when it's not.
Taxable event
If your international money transfer involves any of the following, then chances are you will need to declare it.
- Property investments. Rent from an overseas property needs to be declared as foreign income, and selling one may mean paying capital gains tax, whether or not you transfer the money to Australia.
- Business transactions. You are obligated to pay tax on the income generated from your business overseas.
- Employment income. If you're an Australian resident for tax purposes, money you earn as an employee overseas is generally taxable, whether you work full-time, part-time or casually.
- Pension or superannuation. Overseas pension payments need to be declared on your tax return. Foreign super lump sums can be tax-free if you receive them within 6 months of becoming a resident, but after that, some of the amount may be taxed.
Non-taxable event
There are cases for bringing money into Australia without paying tax. The following large money transfers generally aren't subjected to tax:
- One-time gift. Australia has no gift tax, and genuine one-off gifts from family generally aren't counted as income. However, a gift may be taxable if it's connected to a business activity or the way you earn income. If you invest the gift, any income it earns can be taxed.
- Inheritance. If you're a beneficiary, you won't need to pay taxes on the inheritance money you receive from abroad. If you chose to invest this money, any income or capital gains it earns may be taxable and should be reported on your tax.
- Savings you bring into Australia when emigrating. If you're moving to Australia for the first time, savings you transfer through a bank or money transfer provider are not taxed as income and you declare nothing to customs - a customs declaration is only needed if you physically carry, mail or ship AUD$10,000 or more in cash or bearer instruments across the border.
Just keep in mind, for the above non-taxable events, you will still need to check any local tax responsibilities in the country the transfer is being sent from.
If you have any confusion over whether your money transfer is taxable, it is best to speak to a tax professional to make sure you comply with Australia's taxation regulations.
What happens if I don't declare my taxable money transfer?
If you don't declare taxable income that's been transferred to you, you risk penalties and interest charges from the ATO. More serious consequences include criminal convictions and even prison sentences.
A criminal record can affect your future job and travel plans, and the ATO can even stop you from leaving Australia if you have unpaid tax debts. So it's important to declare any taxable income on your annual tax return, including income that's been transferred to you from overseas. If you have any doubts, speak to a tax professional for guidance.
What steps can I take to avoid legal or tax problems?
There are things you can do to make sure you avoid getting into any legal or tax difficulties. Here are some tips:
- Record everything. Keep records of each transaction that show where your money came from. The ATO uses AUSTRAC transfer data to spot transfers that don't match what people declare, so good records make it easy to explain your money if you're asked.
- Seek professional advice. A tax professional can help you work out what, if anything, you need to declare, and make sure you're following the rules in Australia and in the country the money is coming from.
- Use a reputable money transfer provider. Take a look and compare our recommended money transfer providers. Reputable providers will abide by AUSTRAC regulations and obligations such as reporting their financial transactions and any suspicious activity. You can check whether a provider is registered on AUSTRAC's Remittance Sector Register.
How to make a large international money transfer
If you are looking to send a large amount of money to Australia, you'll typically find specialist international money transfer providers offer lower transaction fees and more competitive exchange rates. You can use our comparison table to compare our hand-picked list of specialists.
However, if you want to explore other ways of transferring a large amount internationally, take a look at our detailed guide which breaks down alternative options.
Services that can help with large transfers
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Bringing money into Australia
There's no limit on how much money you can bring into Australia. However, if the combined value of the cash (in Australian or foreign currency) and bearer negotiable instruments you're carrying is AUD$10,000 or more, you need to declare it.
There are two types of money you need to declare when you physically bring them into Australia: physical cash and bearer negotiable instruments (BNIs)
Physical currency
Cash can be declared when you enter Australia at the airport or seaport, or online through AUSTRAC before you reach customs. The declaration form needs to be completed when the combined value of the physical currency and bearer negotiable instruments you bring into Australia is AUD$10,000 or more.
BNIs
These are non-cash forms of money, such as cheques, traveller's cheques, bearer bonds, money orders and promissory notes. Money items without an assigned value or a specified payee (like black cheques) are also considered BNIs. Since 17 June 2022 you must declare BNIs proactively when their combined value with any physical currency you are carrying is AUD$10,000 or more - you no longer wait to be asked. Failing to report carries penalties of up to 2 years imprisonment and/or a fine, and undeclared money can be seized.
Rules to be aware of
You could face penalties if you violate any of the following rules:
- Children are not exempt from declaring money when necessary.
- Travellers are allowed to carry money for someone else, but this must be declared. Personal information and details of who they are transporting the money for needs to be reported.
- Splitting up a large amount between people in a group to avoid the AUD$10,000 declaration threshold is known as 'structuring', and it's illegal.
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I won $800,000 US in a samsung lottery and a courier was bringing it too me they first went to hobart international airport they done all the necessary steps to be allowed to continue ,now i live in nsw and it was redirected to brisbane international airport now they are saying that it has to be exchanged before it continues to me i have an exchange company in the town i live in so do i need to exchange it before or after i receive it and do they have the right to hold it if all the paperwork is done
Hi Mark, Unfortunately, this sounds like a scam – money transfers don’t work that way. Definitely don’t share any bank details or pay any money to access your “winnings”. I’d suggest getting in touch with IDCare for more help dealing with your situation.
Hi Kate, if I send $5m from my foreign currency account in Ghana to my NAB account in Australia, what kind of forms does my bank need to provide and do I have to declare this transaction to AUSTRAC? The funds will be used to strengthen the financial position for my fresh chilled orange juice machines in WA, SA and NT. Thanks.
Hi Robert, a $5 million transfer would definitely need to be declared, and as you’re planning to use them for business purposes there could also be additional implications. Given the size of the funds involved and the complexity of the situation, it would be wise to seek professional financial advice before making the transfer. Hope this helps.
Hi
I have just turned 55 and am eligible to take up to 25% of my pension tax free. However i now reside in Australia and my question is will I have to pay tax if I transferred from UK bank account to an Australian bank account ?
Hi Stephen,
We’re unable to advise on tax implications for specific personal situations. It would be best to chat to a tax advisor to see how this situation may impact you.
Elizabeth
What are the tax implications for funds transfers from Namibia to Australia? Transfers exceeding AU$100 000.00
Hi Mark,
We’re a review site and not licenced to provide personal taxation advice. We recommend you contact the ATO on 13 28 61 with your query.
Best of luck!
Hi, we are family of four 2 adults and 2 kids under 18. In regards to the money we can bring into Australia, Is the $10,000 cap for the whole family ‘or’ is this for individuals?
Thanks
Hi Vik,
According to Austrak, there is no limit to the amount of money that you can travel with. However amounts greater than $10,000 must be declared. Sharing cash or non-cash forms of money between travelling parties to avoid reporting obligations is called ‘structuring’ and it is against the law.
For example, a party of travellers, such as a family of four, might choose to break up a reportable amount of currency among themselves, so that each traveller is carrying less than $10,000. Austrac reports that if this involves, for example, a young child ‘carrying’ AUD9,950 across the border, it may be considered that the main purpose of dividing the cash among the party is to avoid the reporting requirement, and this would be against the law.
Hope this helps.