The end of $10,000 + cash transactions?
You may have read about a proposal to ban cash transactions in excess of $10,000. Well, that is a step closer to becoming law as the Parliament is now considering it (the Currency (Restrictions on the Use of Cash) Bill 2019).
If the Bill is passed by the Parliament, it will be a criminal offence for all individuals, companies, partnerships, trusts and other entities to make or accept cash payments (including gifts and loans) of $10,000 or more. Why $10,000? Because it is consistent with the reporting threshold under the anti-money laundering/counter terrorism financing (AML/CTF) regime.
A series of payments totalling $10,000 or more will be caught by the new rules if the payments are for the same supply or part of a single gift or loan. An example would be the purchase of a car by instalments. Regular payments under $10,000 between the same parties will be acceptable where distinct things are supplied.
The new laws will apply to foreign currency as well as Australian currency.
Note! If a partnership breaks the law, each partner can be prosecuted. If a trust breaks the law, the trustee (or each trustee if more than one) can be prosecuted.
What are the exceptions?
Draft rules released by the Government specify a number of exceptions. These will include:
- personal or private transactions unless involving real property
- digital currency transactions
- payments that are subject to reporting obligations under the AML/CTF regime
- exceptional transactions where no alternative method of payment could reasonably be used. ■
Ref: TaxWise Business November 2019