Property and shares can be gifted, as well as cash

Many parents help their children financially.

Support can take many forms, from allowing adult children to live at home rent free to helping with education costs.

And it’s not uncommon for parents to contribute to the deposit for a property.

Gifting is big business: be- tween 2000 and 2019, the value of money gifted by parents tripled from roughly $4 billion to $12 billion a year.

The number and value of gifts also increased, with the average gift in 2019 being $8000.

While it’s possible to also gift assets like property and shares, they do come with added complications and costs.

Here are three considerations from tax expert Mark Chapman: 1 WATCH OUT FOR CAPITAL GAINS TAX

“CGT is not an issue for cars (which are exempt), but it is likely to be for gifts of both shares and property. So, if you decide to give shares or property, the giver will be subject to CGT on the disposal – and if gifting to children (or other family), the asset will be deemed to have been disposed of at its market value, which could trigger a hefty CGT bill.”

2 RECORD THE MARKET VALUE

“If gifting shares or property, make sure you know what the

How to get them involved

It is important to instil in them the ability to speak openly about it.

One money-making idea that worked for Hamilton is the return-and-earn recycling program that pays a 10 cent refund for an eligible drink container in NSW.

“I turned the garage into a mini recycling depot,” she says.

“It got the kids involved to earn money that way.

“And then we would split it three ways so that they had to put in an equal amount of effort to earn.”

When Hamilton’s children ask for new shoes or a phone upgrade, she will introduce a savings goal, partnering with them for big purchases: “You save up half the money, I will contribute.” market value of the asset is on the date of gift.

Her kids have piggy banks with four compartments: save, spend, invest and give.

If they want a branded item, Hamilton points out they can buy a perfectly good bag or T-shirt from an affordable department store and save a lot of money.

“If they still want the expensive one, I say this is what we’re going to do,” referring to the savings goal.

Her own parents instilled in her that you don’t spend what you don’t have.

“That’s not difficult for shares listed on the stock exchange – you can simply look it up that day online – but for private company shares or real estate, you may need a professional valuer to give you a written valuation.”

3 MAKE USE OF ANY CONCESSIONS

“If you decide to pass on the home you are living in, perhaps spurred by a tree change or a desire to downsize, you may be able to use the main residence exemption to reduce or eliminate your CGT bill.”

TOM WATSON