Legal and tax requirements for transferring large sums of money into Australia
What you should know about the tax implications when transferring money from overseas.
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Transferring your life savings ahead of immigrating, funding a business opportunity or inheriting money from family abroad? Whatever your reasons for sending money to Australia, there’s a lot to consider.
You can’t avoid the laws and legal paperwork that go along with transferring large amounts of money, so before you move your cash to Australia, familiarise yourself with these laws and regulations.
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What's in this guide?
- Do I have to report large transfers into Australia?
- Tax implications
- Bringing money into Australia
- What are the penalties for not declaring a large remittance?
- What other steps should I take to avoid legal or tax problems?
- What should I expect when transferring money to Australia?
- Services that can help with large transfers
- Questions you may have about large transfers
Do I have to report large transfers into Australia?
No matter where you’re from, if you’re receiving more than $10,000 or a foreign currency equivalent, you’ll need to abide by Australian laws put in place to both protect your money and protect the interests of the government.
Any amount of money transferred into Australia as an international funds transfer instruction (IFTI) must have an IFTI-E report submitted within 10 business days.
The monitoring is done by regulatory body AUSTRAC (Australian Transaction Reports and Analysis Centre), which collects data on all cash transfers that exceed $10,000. This is to help prevent money laundering or terrorism.
Money transfer businesses, which often solely send money between countries, sometimes have reporting thresholds as low as $1,000.
Australian law requires banks and money transfer companies to report personal, identifiable information, which can include the following:
- Your name and contact information.
- The name and contact information of the person who sent you the money.
- If it’s a bank transfer, the financial details of the recipient, including SWIFT code.
- Your banking details, including your bank account number.
- The amount you received.
- If you’re sending money on behalf of a company, details of the business, including your employment and its Australian Business Number (ABN).
If someone is planning to send a large sum of money to you in Australia, you could be on the hook for taxes regulated by the Australian Taxation Office (ATO), depending on the reason why they are sending it to you.
When might I need to pay taxes?
You'll usually need to pay taxes when you transfer large amounts of money into Australia if it's come from:
- Property investments. Payment received via money transfer from rental properties or property sales will be required to be reported as foreign investment income.
- Your business. You are obligated to pay tax on the income generated from your overseas business.
- Employment income. The money you earn as an employee overseas will be taxed regardless of your status as full-time, part-time, or other.
- Pension or superannuation. Funds received as an overseas pension or superannuation are subjected to tax and need to be declared on your tax return.
However, if you have already paid tax to the foreign country associated with your income, you may be eligible for tax offsets depending on whether Australia has a tax treaty with that country.
Tax-free money transfers
There are cases for bringing money into the country without paying tax. The following large money transfers generally aren’t subjected to Australia’s tax:
- One-time gift. 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.
- 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, the interest may be taxable and should be reported on your tax.
- Money you bring with you if you’re moving to Australia for the first time. If it’s more than AUD$10,000 or a foreign equivalent, you’ll still need to declare it to customs.
As long as you’ve attended to any local tax responsibilities in your home country, these kinds of money transfers won’t have any tax requirements.
If you’re concerned about coming into possession of a large sum of money or property, speak to a tax professional to make sure you comply with Australia's taxation regulations.
Bringing money into Australia
There are two types of money you can bring into Australia: physical cash and bearer negotiable instruments (BNIs). There is no limit to the amount of money you can bring into Australia. However, if the combined value of cash in the local or foreign currency you are carrying is equivalent to $10,000 or over, it needs to be declared.
Physical currency can be declared when you enter Australia at the international airport or seaport. The declaration form only needs to be completed when the total cash value you bring into Australia exceeds $9,999 - not counting BNIs.
BNIs are non-cash forms of money and include cheques, bearer bonds and money orders. Money items without an assigned value or a specified payee (like blank cheques) are also considered BNIs. You only need to declare these if it is requested by customs.
Beware of the rules applied to carrying money into Australia. You could face penalties if you are seen violating them:
- Children are not exempt from requiring to declare 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 across individuals within a group to avoid the $10,000 cap, or 'structuring', is illegal.
What are the penalties for not declaring a large remittance?
If your loved ones in Australia receive a large money transfer that's not exempt from the gift tax and choose not to pay the tax, they risk fines and other penalties. More serious consequences include criminal convictions and even prison sentences.
Criminal convictions can affect your employment and ability to travel outside the country. Encourage your friends and family to report any large money transfers on their annual tax returns to the Australian Taxation Office. Or ask them to speak to a tax professional for guidance.
What other steps should I take to avoid legal or tax problems?
- Record everything. Large money transfers that may be subjected to tax will be reviewed. The best way to protect yourself from legal issues is by providing records of each transaction to prove the source of your money.
- Seek professional advice.To avoid the severe penalties that come with a failure to report large sums of money being brought into the country, speak with a professional to guarantee that everything is above board and complies with the laws of all countries involved.
What should I expect when transferring money to Australia?
Sending money through a bank or money transfer specialist makes for easy, convenient bank deposits or cash pickups. In general, you may need to provide photo ID or a transaction number to receive your money transfer in person.
If you already have an account with the bank or money transfer company, you may not need to provide ID each time you receive money. However, online money transfers may have stricter rules when it comes to proof of ID, and they could ask for additional documentation or ask you to verify your identity by phone.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
To get started, take a look at our table below to compare providers and find which one is most suitable for your needs.
Services that can help with large transfers
DISCLAIMER: This article is general advice. It does not consider your own personal circumstances and may not be applicable to you. You should obtain professional advice and consider your own situation before acting on anything contained in our article.
Questions you may have about large transfers
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