My Father Wants His Money Back - Where Do I Stand?

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adrian

Member
17 July 2014
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He gave me a personal loan of one million dollars by transferring it to an investment account in my name, therefore I would collect the interest and therefore I would have to pay the tax on the interest. He did this so he wouldn't have to pay the tax to the ATO. Fair enough but now he wants the money back and he is a multi millionaire - do I have to give the money back? He says he is going to get a solicitor onto me to make me pay it back. Where do I stand?
 

Worldly1

Well-Known Member
25 April 2014
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Australia
Hi Adrian,
It would come down to the circumstances - was the money specifically gifted or loaned to you?
Will your father cover your tax expenses?
You may wish use some of that money to engage a lawyer to advise you. Also be aware that you don't want to knowingly assist someone with tax avoidance - the ATO won't like that.
 

adrian

Member
17 July 2014
2
0
1
hi, thankyou for reply,
obviously i would be saying it was a gift and dad would be saying it was a loan,
and therefore perhaps incriminating himself as a tax avoider, and i note your comment
about assissting someone with tax avoidance but i don't think the tax dept would mind (considering they would be getting more
tax income from me being in a higher tax bracket than my father )
i will be getting paid legal assisstance but i thought there may be a simple answer like "he gave you the money as a gift - its yours
you don't have to give it back and there is no law that says you have to" is there any sort of short answer or is it going to be
a battle and what are my chances of having to give it back ? thankyou.
 

winston wolf

Well-Known Member
21 April 2014
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Adelaide
changefpa.com.au
With a $1000000 at stake I would guess it would for be worth a fight for him.
I assume you are an adult and you were aware of what he was doing.
He should have set up a trust.
 

AllForHer

Well-Known Member
23 July 2014
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2,894
No, there's no short answer because this is a complicated matter. There's potential tax fraud and tax avoidance, contending arguments about gift vs. loan, and credible sides to both arguments.

At the end of the day, you knew why he was giving you the money and you knew it wasn't a gift. I assume there is also no paperwork around the exchange of money, just a bank statement showing the transfer. Are you in for an uphill battle? I would say yes.
 
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