Receiving Money From Overseas? Documentation Matters

What the Cheung Case Means If Family Overseas Is Sending You Money

If a family member overseas is planning to send you money, whether as a gift, inheritance, loan or financial support, a recent court decision provides an important reminder about the value of proper documentation.

The case involved Rene Cheung, who retired to Australia from Vanuatu in 2000. Over the following decade, his sister, Graziella Leong, transferred more than $30 million to him across 99 separate deposits. Mr Cheung maintained the transfers were gifts from his sister and declared the interest he earned on the funds, but not the money itself.

The ATO took a different view and treated the transfers as taxable income. After challenging the assessment, Mr Cheung initially succeeded in the Federal Court in late 2024. The Court accepted evidence that the transfers were genuine gifts between siblings and reflected a longstanding family practice of sharing wealth.

However, the matter didn't end there.

In May 2026, the Full Federal Court overturned the earlier decision. The Court found that the documentary evidence and inconsistencies in the family's accounts had not been adequately considered. Ultimately, Mr Cheung was unable to establish that the assessments were excessive, and the ATO's position prevailed.

The outcome highlights an important lesson for anyone receiving significant funds from overseas. Even where a gift is genuine and comes from a close family member, supporting evidence can be critical.

In a tax dispute, the burden of proof generally rests with the taxpayer. The ATO does not necessarily need to prove where the money came from. Instead, you may need to demonstrate that the funds were not income and support that position with appropriate documentation.

What To Do Before The Money Arrives

The ATO has published guidance on documenting genuine gifts from overseas. Broadly speaking, the documentation should support the nature of the transfer, demonstrate that the parties' actions are consistent with that explanation, and show that the funds genuinely belong to the person making the gift.

If you're expecting to receive money from overseas, it may be worth gathering the following information at the time of the transfer rather than trying to locate it years later:

A deed of gift prepared and signed before, or at the time, the money is transferred
Formal identification for the donor, such as a passport or national identity card
Bank statements showing the transfer and the donor's financial capacity to make the gift
Any declarations lodged by the donor in their country of residence relating to the transfer
For inheritances, certified copies of wills or estate distribution statements
Records tracing the movement of funds from the donor's account to yours

While it may feel excessive at the time, these records can become invaluable if questions arise in the future.

The ATO can review overseas transfers years after they occur, and transfers of more than $10,000 into Australia are already reported to AUSTRAC. Having the paperwork in place from day one is often far easier than trying to recreate the story years later.

If family overseas is planning to send you money, whether it's a gift, inheritance, loan or assistance with a property purchase, it's worth seeking advice before the transfer takes place. The right documentation upfront can provide clarity, reduce risk and help ensure your intentions are properly supported should questions ever arise.

Planning An Overseas Transfer?

The right documentation before money changes hands can help avoid costly complications down the track.

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