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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Is a stamp document required when receiving money from overseas?
Hi Michelle,
Thank you for getting in touch with Finder.
It is not a requirement specially if it’s transferred to your bank account. If via money transfer company, the remittance network provider is responsible for reporting the electronic funds transfer instruction (IFTIs) on behalf of its affiliates.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
Dear finder,
My mum is planning on sending some money to me as a gift from the UK. This may need to come in two separate transactions but both will be in excess of the 10,000 threshold. Would this break the ‘one time gift’ rule?
Thanks
Hi Alan,
Thanks for your inquiry!
As it says on our page for money transfers sent as a gift. It should be a One-time gift meaning it must be sent once.
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 you earn income. If you decide to invest this gift money, the income it generates can be taxed.
I hope this helps!
Best,
Nikki
I moved from the UK to Australia 20 years ago and I’ve had a savings account there with AUD58,000. How do I declare it? Do I need to declare it? It lost a lot of its equivalent value since I moved here.
Hi Ray,
Thank you for reaching out.
If you are planning to transfer the money from UK to Australia amounting to 58,000 AUD, yes you need to declare the amount to avoid severe penalties that come with a failure to report large sums of money being brought into the country.
Please coordinate with the Australian Transaction Reports and Analysis Centre to report the incoming amount. If you need professional assistance, you can speak to an FX expert by filling out the online form found on this page.
Hope this helps! 😊
Kind Regards,
Mai
My father-in-law wants to send a large sum of money from overseas to his daughter’s (my wife) Australian Bank Account. He wants to gift the money so that we can buy a house in Australia without going through a mortgage or paying any interest to the banks to buy a house to live in. Me & my wife both work full time & pay our taxes every year. At the moment we live in a rental & are looking forward to this option where we can buy a house outright without paying interest. My questions:-
1. Any restrictions (as in, restrictions from ATO or Banks) if my father-in-law wants to send around $500k AUD to his daughter’s bank account
2. Does any one have to provide any paperwork about the large sum being transferred from overseas bank account to a Australian bank account.
3. Do we have to pay tax on the amount we receive in our bank account from overseas?
My understanding is that, since my father-in-law has worked all his life and saved money & wants to gift that money to his daughter so that she can buy a house to live with her husband & kids, there shouldn’t be any problems as such. But I just wanted to get a clear & legal answer before we can go down this path.
Thanks
Hi Syed,
Thank you for reaching out to Finder.
As long as you go through a legitimate money transfer provider, you won’t need to provide any extra paperwork. The main legal considerations when sending large sums of money are the Know Your Customer (KYC) and Anti-Money Laundering (AML) laws, but your money transfer provider will look after the necessary documents when you submit your identification for processing.
As a good rule of thumb, keep all records and emails relating to the transfer in case you need them later.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 you earn income. If you decide to invest this gift money, the income it generates can be taxed. It would be best to consult a tax specialist for guidance. Hope this helps!
Cheers,
Reggie
I am considering returning to Australia and I need to transfer funds from Europe in order to purchase a house. What documentation is required from my side to accompany the funds?
Hi Dennis,
Thank you for your comment.
Your bank or money transfer service might ask for your ID documents, information about where the payment is from, and who it’s going to. Some companies will take this information for every transaction, as they’re obliged to report payments to AUSTRAC – both large and small – and anything which might look suspicious.
Because you’re also thinking of returning to Australia, there are foreign exchange companies that allow you to create an account and link two bank accounts. Once this has been set up, you are able to transfer money from your foreign bank account to your Australian bank account.
The minimum requirements for starting an account is your address, personal details, certified identification, a bank account to draw from and a list of the countries which you want to send money. Most applications can be made online.
Once your account is ready to trade, you can log in, get a quote and if you are happy with the rate, you can accept the rate and provide details of an account to draw from or transfer to. Before you transfer, notify your bank, both the incoming and outgoing, of a large sum of money being moved. Often if you have never done this before, limits are automatically imposed unless at your request and the bank approves.
I hope this helps.
Regards,
Jhezelyn