Assurance of Support

[Cosevo]

Been trying to find out about our existing Assurance of Support.  My Daughter sponsored us ten years ago but as she did not have the money we paid it $14,000

This was set up in the Commonwealth Bank as instructed.

In the past ten years she has had to declare this money for tax reasons and was paying tax on the interest and I believe at one point it was about $600. Surely this is not right?

I also read somewhere (too late for us now) that a couples child could not put the bond money up so they paid it (like we did) but they had the interest from this bond paid into their own bank account.

My Daughter said Commonwealth will not do that? who is right please.

 

[Marisawright]

Officially, it was your daughter's responsibility to put up the money.  As far as the government is concerned, what you did was gift her the money so she could pay the bond. Therefore the money belongs to her and so does the interest.  Whatever you arranged privately is your business.

We had someone post here recently who had done the same thing.  When it came time to reclaim the money, the child kept the lot.  The parents didn't have a leg to stand on because the bank account  was in his name and  legally, they shouldn't have been providing the money in the first place.

I'd have thought your daughter could direct her interest to be paid into whatever bank account she liked, perhaps it's the way she is asking the question.  

 

Edited October 24, 2018 by Marisawright

[Cosevo]

Thank you Marisa.  My Daughter did say she could not move the interest to any bank account and it had to stay in the Commonwealth Bank.

Should she also have been paying tax on the interest?

 

That was not very nice of that couples daughter that kept the money was it.

[Marisawright]

20 minutes ago, Cosevo said:

Thank you Marisa.  My Daughter did say she could not move the interest to any bank account and it had to stay in the Commonwealth Bank.

Should she also have been paying tax on the interest?

 

That was not very nice of that couples daughter that kept the money was it.

Yes, as it's income she would have to pay tax on it.  And no, it wasn't very nice!

[Amber Snowball]

4 hours ago, Cosevo said:

Thank you Marisa.  My Daughter did say she could not move the interest to any bank account and it had to stay in the Commonwealth Bank.

Should she also have been paying tax on the interest?

 

That was not very nice of that couples daughter that kept the money was it.

The interst is paid to my nominated account, not a commonwealth account and I pay tax on it. Once I have the money I can do what I want with it. 

As I have now left Australia I declared this and the Commonwealth should be applying witholding tax on it if needed.

My mum also put the bond up but the Government considers it mine and it will only be returned to me. I will then pass it back to her, but that is a private agreement. 

I suggest she return to the Commonwealth and ask to change the nominated account if that is what you want, but she will still have to declare it for tax as it is legally her income.

[Tulip1]

7 hours ago, Cosevo said:

Been trying to find out about our existing Assurance of Support.  My Daughter sponsored us ten years ago but as she did not have the money we paid it $14,000

This was set up in the Commonwealth Bank as instructed.

In the past ten years she has had to declare this money for tax reasons and was paying tax on the interest and I believe at one point it was about $600. Surely this is not right?

I also read somewhere (too late for us now) that a couples child could not put the bond money up so they paid it (like we did) but they had the interest from this bond paid into their own bank account.

My Daughter said Commonwealth will not do that? who is right please.

 

She will be taxed on interest earned but only at whatever the tax threshold is. If it's 20% for example she'll pay that in tax but will keep 80% of the interest if that makes sense so you'll still be making on that money.

Edited October 24, 2018 by Tulip1