Tax office looks carefully at kid’s accounts

Parents or grandparents who set up and deposit money into bank accounts for children must be able to proves that the money is not theirs to withdraw and use as they want to if they are to avoid paying tax on it. The ATO has ruled that if the money really belongs to the parent they should the interest earned on their tax return. If the money belongs to the child and the child earns less than $416 per year from all sources, then no tax is payable. If large sums of money are deposited and withdrawn it seems likely that the tax office may rule that the parent really owns the money.

Source: Herald Sun

Advertisement