Invest in retired dad's trading acccount

Discussion in 'Share Investing Strategies, Theories & Education' started by Chris21, 11th Jul, 2021.

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  1. Chris21

    Chris21 Well-Known Member

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    Lawfully, can I gift money to my retired dad - who will use it for trading. Then he will gift me money back along with profit - without adding to personal income for tax purpose?
     
    Chris21, 11th Jul, 2021
    #1
  2. Anne11

    Anne11 Well-Known Member

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    Anne11, 11th Jul, 2021
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  3. Stoffo

    Stoffo Well-Known Member

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    Any trading that makes a profit will have to pay tax
    So your dad's "trading" may make a profit and he pays tax only to return the post tax profits to you ?
    What if he loses the lot ?
    It's possible (if you have that sort of relationship) but it would be better to have a loan agreement in place !
    There are limits on how much anyone can legally gift
     
    Stoffo, 11th Jul, 2021
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  4. geoffw

    geoffw Moderator Staff Member

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    If your dad is on a pension, the money he gifts back to you may cause him problems. There is a limit about how much he can gift without it affecting his assets test.
     
    geoffw, 11th Jul, 2021
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  5. Trainee

    Trainee Well-Known Member

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    What sort of amounts are you thinking about? There might be other options like family trusts.
     
    Trainee, 11th Jul, 2021
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If he reports the income yes.

    But consider s100A
     
    Terry_w, 11th Jul, 2021
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  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    There are no limits on gifting but if can affect pensions
     
    Terry_w, 11th Jul, 2021
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  8. Marg4000

    Marg4000 Well-Known Member

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    If dad is on a pension, a gift to him will have consequences.
    Also, gifting money back to you will also have an impact on any pension.
    If dad dies, gifted money will form part of his estate and will be distributed according to his will.

    Are you simply trying to minimise tax? If so, consult your accountant.
     
    Marg4000, 11th Jul, 2021
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  9. Chris21

    Chris21 Well-Known Member

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    Thank you everyone for your response. My dad does not get any pension. He is an overseas migrant - Australian PR but not citizen yet. He will not be eligible for a pension anytime soon.

    I am talking about $100-500K here over period of 1-3 years.

    May be , I will start with $100K gift in 1st lot. He will invest money , hopefully make profits (but my help in stock/ETF selection) , pays any applicable tax post sale and gift me initial money + profit back to me when I need it to buy any investments or new house to live - lets say after 6 months to 1 year. He will report income and pay all taxes.

    @Terry_w - I read about s100A. It seems to related to "trust" setup. I was thinking of doing this without any trust. (just personal trust between myself and my father :))
     
    Chris21, 11th Jul, 2021
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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It sounds like a trust to me. Also need to consider Part IVA.
     
    Terry_w, 11th Jul, 2021
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  11. Trainee

    Trainee Well-Known Member

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    What is the purpose of all of this? You are on a higher tax rate?
     
    Trainee, 11th Jul, 2021
    #11
  12. Chris21

    Chris21 Well-Known Member

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    That's correct.
     
    Chris21, 11th Jul, 2021
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  13. mkbonline

    mkbonline Well-Known Member

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    Is this legal ? Can you avoid tax by investing on your dad name and then transfer gains to yourself as gift ?
     
    mkbonline, 14th Jul, 2021
    #13
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes legal. But a question of consequences
     
    Terry_w, 14th Jul, 2021
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