Ask Noel

Question

I have come into some money and would very much like to help my kids.

I know there are tax problems with gifting money to your children but are you allowed to put money into an offset account attached to their home loan?

Answer

There is no gift tax in Australia so you are free to gift as much as you wish to your children without penalty.

However, you need to bear in mind that gifts in excess of $10,000 a year would adversely affect any Centrelink benefits you may be entitled to.

Lending money to your children to place in their offset account is a splendid way to help them as it enables them to receive the interest on the money effectively tax-free.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice before making decisions.

Email: noelwhit@gmail.com.