Ask Noel: Is there any gift tax in Australia?

In a recent column you said that there is no gift duty in Australia in relation to a gift of "a large amount". I thought there was an annual restriction on gifts of $10,000 a year with a limit of $30,000 over five years and that gifts greater than that did attract some kind of duty or tax.

There is no gift duty as such in Australia - however for Centrelink purposes there are rules aimed at discouraging people from giving away assets with the purpose of achieving a higher age pension. The $10,000 a year, $30,000 over five years, which you refer to, are the maximum amounts a person can give away without affecting their pension. Centrelink treats sums in excess of this amount as a deemed asset for five years from the date of the gift. Your sister may have to pay stamp duty.

You recently wrote that a couple on the full pension could earn $125 a week each from casual work, and make withdrawals as they wish from their super. Centrelink advises me that once you draw a pension, then any super account in your name is deemed to be earning an income (taken into account) in an appropriate adjustment to your pension. Your article does not seem to imply this. Does your super account still need to be in accumulation phase?

I have pointed out in this column numerous times that superannuation ceases to be an exempt asset for people under pensionable age once they start to draw a pension from it. This is quite different from a situation where a person makes withdrawals from time to time from their superannuation, while keeping it in accumulation mode.

My mother, aged 89, has been in a nursing home for 13 months. The room costs $295,000. We paid part of this by a bond of $130,000 and Mum pays $2750 a month. We rented out her house for $480 a week, she gets an age pension of $564 a fortnight and Dad receives super of $696 a fortnight. Mum has $10,000 in the bank. Her two years exemption for Centrelink purposes is coming up in September 2018. I am not sure how much her pension and super would be affected. Should we sell the house or leave it as is?

Rachel Lane from Aged Care Gurus explains: "The answer to your question is based on the day your mother entered aged care - changes over the past two years have created three classes of residents: those who entered prior to January 1, 2016, those who entered between January 1, 2016 and December 31, 2016 and those who enter after January 1, 2017.

As your mother entered care in 2016, the former home (and any rent) will be exempt from her pension beyond the two-year exemption if she is paying a daily accommodation payment and renting the home. From an aged care point of view, the net rent and the house asset value up to the capped amount of $162,815 are currently being included in the calculation of her aged care means-tested care fee. There are tax and estate planning considerations of such a strategy, you should seek advice to ensure you understand all aspects of this strategy."

My wife is 66 and cannot make contributions to her superannuation as she doesn't qualify under the work test rules. Can I make a spouse contribution even though she is 66 - I am 64?

Unfortunately, the rules prevent people making contributions on behalf of their spouse once the spouse turns 65, unless the spouse can pass the work test. However, as you are 64 you can make non-concessional contributions to your own super provided your total superannuation balance does not exceed $1.6 million.

My sister and I have inherited the family home of 60 years. If I were to sell my half share to her side of the family what tax would I have to pay and how would I go about it? We both do not work as my sister was my mother's carer and I am not well enough. The home is valued at about $750,000.

Your accountant is the appropriate person to go to for advice but the property should have passed to you free of any capital gains tax liability so your cost base will be the market value at the date of the death of the owner. If you sell your share for that sum there should be no capital gains tax to pay.

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. Twitter: @noelwhittaker

This story Ask Noel: Is there any gift tax in Australia? first appeared on The Sydney Morning Herald.