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Income tax: Income – when gifts are assessable income

On 5 December 2023 IR issued a replacement interpretation statement on when gifts are assessable income.


A gift is not usually subject to income tax. The interpretation statement considers the circumstances in which a gift is subject to income tax in the recipient’s hands. The statement applies both to monetary gifts and to non-monetary gifts that are convertible to money. It does not apply to gifts that are not subject to income tax but may be family scheme income for the purposes of Working for Families tax credits.



Broadly, income tax legislation taxes “income”. Gifts are not usually subject to income tax in the recipient’s hands because, generally, they are made as a mark of affection, esteem or respect for an individual and do not have the character of “income”. However, in some circumstances a gift may be assessable income in the recipient’s hands. The interpretation statement considers those circumstances.


A “gift” refers to the receipt of an amount in money or money’s worth that the payer makes voluntarily by way of benefaction and the payer receives no material benefit or advantage in return. A gift for the purposes of this statement may include koha.


Whether a gift is assessable to the recipient must be objectively decided on a case-by-case basis, considering all the circumstances of how and why the gift was made. Each gift must be considered on its own facts.


  • A gift may be liable to income tax if it is a person’s income. The specific provisions relevant to gifts include amounts derived:

  • from a business;

  • from carrying on or carrying out an undertaking or scheme entered into or devised for the purpose of making a profit (a profit-making activity);

  • in connection with employment; and

  • in undertaking a voluntary activity.


If you receive gifts and would like to know more, please reach out to us.


Disclaimer: This publication has been carefully prepared, but it has been written in general terms only. The publication should not be relied upon to provide specific information without also obtaining appropriate professional advice after detailed examination of your particular situation.


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