Transferring money from parents, a wife or a child to a bank card does not, in itself, create a tax liability for the recipient. This was stated in a comment to RBC-Ukraine by Ihor Yasko, managing partner of WINNER Law Firm, Candidate of Legal Sciences, and lawyer. According to him, the tax consequences depend not on the wording of the payment purpose that the client entered in the banking app, but on the legal nature of the funds received and the evidentiary base that a person is able to provide upon request from the tax authority.
Zero rate with no limit on the amount for close relatives
A 0% personal income tax (PIT) rate applies, with no military levy payable, for relatives of the first and second degree of kinship, regardless of the amount of the transfer. The first degree includes parents, a husband or wife, and children, including adopted ones. The second degree includes full brothers and sisters, grandmothers, grandfathers and grandchildren. If the funds were received as a gift from these persons, no tax liability arises at all. The lawyer emphasises that this is not a benefit "up to a certain amount" but an unconditional exemption: Article 174 of the Tax Code of Ukraine applies the same rules to gifts from individuals as to inheritance. "A transfer from a mother, son or wife to a card is not automatically an 'unverified income' from which taxes should be paid," Yasko noted.
Distant relatives and unrelated persons: 10% rate
A very different picture emerges if the donor does not belong to the first or second degree of kinship. A gift from an aunt, uncle, cousin, godparent, friend or a cohabiting partner without a registered marriage is subject to 5% PIT and a 5% military levy — 10% of the amount in total. If the donor or the recipient has non-resident status, a 18% PIT rate applies. The recipient of a taxable gift is obliged to declare the income: the declaration is filed by 1 May of the following year, and the tax itself is paid by 1 August.
Evidentiary base: why "help from relatives" without documents may not work
According to the expert, the risk for the taxpayer arises not from the mere fact of money arriving in a card, but when a person is unable to explain who and on what basis transferred a significant sum to them. "The phrase 'this is help from relatives' without documents may be insufficient if the tax authority asks about the source of the funds," the lawyer warned. For ordinary everyday transfers between close relatives, the law does not require a notarised gift agreement; however, the larger the amount, the more important it is to have a bank statement, a clear payment purpose, documents confirming the kinship, and, for large transfers, a gift agreement on hand. Not every family transfer is a gift: a repayment of a debt, a transfer of joint funds or a compensation of expenses have a different legal nature, and for these one should keep a receipt, a loan agreement or invoices.
Financial monitoring and the prohibition on masking income
The lawyer separately reminded about the mechanism of financial monitoring: a bank is entitled to check the origin of large or atypical transactions, and the zero tax rate does not eliminate the need to explain the source of the funds. It is categorically not recommended to mask payment for work, the sale of goods or entrepreneurial receipts as "help from relatives": the State Tax Service may treat such funds as undeclared income. The expert also clarified that for non-material gifts (items) there is a tax-free limit of 25% of the minimum wage, whereas for monetary gifts from close relatives this restriction does not apply at all.
This material is prepared for informational purposes only and does not constitute financial or legal advice. Before making decisions on tax matters, it is recommended to consult a licensed professional.
