Sending and return funds

[S Triple J]

Hi,

Am after a second opinion on a response to a question I posed to the Australian Tax Office (ATO). Hope someone can reflect on a simmilar scenario or proide some insight.

If I were to wire funds via a money transfer company from my country to a family members bank account in Canada then a day or two later have him wire those funds back to me what would the tax implications be on both of us?

I have been told by the ATO that it is a foreign exchange transfer, which is considered a gift and therefore I wouldn't be subject to any tax, while the receiver would have to report the income generated on the day or two that it sat in his account. So other than the gain or loss through incurred through the transaction, their would'nt be a tax concern.

Does this seem correct, looking for some clarification.

 

[imigrate]

the transfer would be considered as gift so you don't have t pay tax.
If during the few days the money was sitting in a bank, and accumulates interest, the interest itself will be taxable. Depends on how much interest you'd receive, if it is significant enough, your bank will send you a T5 (I think?) showing the income from the interest. If the amount is too small (I was told if less than 5 bucks) you will not receive T5.

[toby]

I agree with Imigrate.

However, quite apart from tax considerations, if the amount is large, such frequent transactions might attract the interest of the authorities mandated to war against money laundering.

[S Triple J]

Your right. Have done some further research and yes the interest will be taxed but barely anything as it's such a small amount. Fortunately this won't be a regular occurance so alls good.

Thanks for your responses,