Friend's dad looking to gift about 100k from Hong Kong - any legal considerations?

It's to be used for a deposit.

He's got a decent amount of money and he simply wants to do a straight forward, run of the mill international transfer from his regular, run of the mill savings account. There's no unusual trusts or anything like that.

Are there any declarations that need to be made? Any particular processes to follow before they go and do that?

 

Many legal issues. Your friend should at least get some eividence from the dad that it is a gift. What if he later wants it back? He might argue it was a loan.

The dad should get legal advice on what could happen if the son either
- dies
- divorces
- loses capacity or
- bankruptcy happens.

It might be better for the dad to give an interest free loan which he may (or may not) forgive later.

 

Oh yes certainly, from a personal perspective these are things that have been considered. My question is more from a government perspective, to make sure it's not seen as money laundering or anything like that. Just wondering if there are any declarations or processes to follow, or is it a relatively straight forward transaction?

 

Gotta love brics money...
What the f--- do we need to do yo make it come up north and not the Mexican caps?

 

There are no restrictions on making gifts as long as they are not income disguised as gifts.

 

Great thanks.

 

I should add - on the Australian side. Not sure about Hong Kong

 

You must be a really good friend if your friend's dad want to gift you 100k

 

The ATO may require his dad to prove he earned the income.

 

If the dad isn't an Australian resident the ATO would not have the power to compel abything like that, nor would they care. Their concern would be more whether the son was receiving income disguised as a gift, not whether the gift giver was up to date on his taxes in a foreign jurisdiction

 

The ATO will treat it as the son's income and tax on it. Better not send the money in one go to avoid tax issue.

 

Sending it in multiple $9000 lots will look even more sus - this used to be called structuring and was an offence. Maybe still is.

What would the ATO try to tax it?

 

I hope you kept the receipt on your crystal ball cos you bought a dud

 

Ummm what?
Why would the money be taxed? Under that statement any money coming in from another country would be taxed on top of already being taxed in the country it likely came from.
Not sure it works like that.

 

As the money is coming into a bank account via transfer, maybe the best place to ask is the bank. They will know of any paperwork that has to be done, if any.
Marg

 

No need and they wouldn't know anything other than the banking and antimoney laundering aspects. These will be automatically recorded.

 

I don't think they have the power to compel you to show anything. But I know from personal experience that people from Hong Kong have been asked to substantiate the money for exactly the reason you say. Simply saying my Hk citizen grandma was rich didn't suffice. Terrible schoolyard bully tactics.

 

well i havent ever been asked and ive done several $50k-100k transfers several times a year ... i know one person who did it once for for $50k and got asked with regards to the source of the money so i have no idea.

 

Oh don't get me wrong. It doesn't seem to happen a lot. But have seen it happen. Well only seems to be an issue in high tax countries like this.

 

Yeah we've been asked to substantiate too but it can easily be done, if a loan then a loan agreement with reasonable terms will suffice and if a gift a letter from the giver explaining will so suffice