By The Chipkie Team, Personal Finance Editorial Team · Last updated 3 October 2026
Money moves between family members constantly in Australia — a deposit top-up, a car, a surprise dental bill, a few months of rent while someone retrains. What almost never moves alongside it is a written record. A simple family loan tracker fixes that: a single, dated record of what was advanced, what has been repaid, and what is still owing. In 2026, with more parents lending into a tight housing market and more adult children leaning on family for cost-of-living relief, that record is often the only thing standing between a loan and an argument.
The good news is that Australia makes this easier than most countries. There is no gift tax and no inheritance tax here, so the question is rarely “what will the ATO charge us?” It is almost always “can we prove what we agreed?”
Key Takeaways
- Australia has no gift tax and no inheritance tax, so the main risks in family lending are evidentiary, Centrelink-related and lender-related — not a tax bill on the transfer itself.
- A loan is only a loan if you can prove it: a written agreement plus an ongoing ledger of advances and repayments is the evidence that survives a dispute, a divorce or a death.
- For Age Pension recipients, gifting is limited to $10,000 per financial year and $30,000 over five financial years before the excess is treated as a deprived asset for five years — a social security rule, not a tax rule.
- If family money is going toward a home deposit, lenders treat a repayable loan very differently from a gift, and signing a gift letter or statutory declaration for money you intend to repay is fraud.
- Every state and territory has a limitation period after which an unenforced debt can no longer be pursued through the courts — a tracker with dated acknowledgements helps protect the lender’s position.
What is a family loan tracker and why does it matter in 2026?
A family loan tracker is a running record of money lent between family members: the principal advanced, the dates, any interest agreed, each repayment received, and the balance outstanding. It converts a vague family understanding into documented evidence. Combined with a signed agreement, it is what turns “we helped them out” into an enforceable, provable debt.
Our experience across the agreements people create tells a consistent story: the loan itself is rarely the problem. The problem is that four years later, nobody agrees on whether $12,000 or $18,000 went across, whether the $400 transfers were repayments or birthday money, and whether it was ever meant to be repaid at all. Courts dealing with unwritten family loans must reconstruct intention from bank statements and text messages — an expensive, uncertain exercise, as anyone who has tried proving a verbal family loan in court will tell you.
Three situations make a tracked record close to essential:
- Multiple children. If one child received help and another did not, an undocumented advance becomes an estate dispute after the parents die.
- A borrower in a relationship. In a Family Court property settlement, an undocumented advance is usually treated as a gift to the couple, not a debt owed to the parents.
- Drawdowns over time. Tuition, renovations or business support paid in instalments are almost impossible to reconstruct later without a ledger.
What should a family loan record actually contain?
At minimum, record the parties, the total facility, each advance with its date and amount, the interest rate (including zero), the repayment schedule, each repayment received, and the running balance. Pair this with a signed agreement covering default, hardship, early repayment and what happens if the lender dies before the loan is repaid.
| Element | Why it matters |
|---|---|
| Date and amount of each advance | Establishes principal and starts the limitation clock |
| Interest rate (even if nil) | Interest received is assessable income to the lender; silence creates ambiguity |
| Repayment schedule | Distinguishes a loan from an open-ended gift |
| Each repayment, dated | Prevents disputes over what the transfers were for |
| Running balance | The single number an executor, lender or court will ask for |
| Security (if any) | A caveat or registered mortgage gives the lender priority |
| Death and estate clause | Says whether the debt is forgiven or deducted from an inheritance |
One nuance most articles miss: acknowledgement refreshes the record. Each state and territory has a limitation statute setting how long a lender has to enforce a simple contract debt. A written acknowledgement of the debt or a part payment can restart that period in most jurisdictions. A tracker that captures periodic signed confirmations is therefore not just tidy bookkeeping — it is a defence against the statute of limitations trap. Check the limitation period that applies in your state before assuming an old debt is still live.
How does a documented family loan affect Centrelink, tax and lenders?
A properly documented loan remains an asset of the lender and is assessed by Centrelink as such. An undocumented transfer looks like a gift, and gifting is capped at $10,000 per financial year and $30,000 across five financial years before the excess is treated as a deprived asset for five years. Interest earned is assessable income; the capital itself is not taxed.
Tax. As the Australian Taxation Office sets out, there is no gift duty in Australia, so lending or giving money to an adult child does not of itself create a tax event. Interest you charge is income you must declare. If the loan is secured over property, or you later forgive it in connection with an asset transfer, capital gains tax rules can engage — individuals holding an asset more than 12 months generally access the 50% CGT discount, apportioned by ownership share on disposal.
Division 7A. If the money comes from a private company rather than from you personally, Division 7A applies and an unpaid loan to a shareholder or associate can be treated as a deemed dividend. Ordinary loans between individuals are unaffected. If a company is in the mix, get advice before the money moves.
Centrelink. For Age Pension and other means-tested payments, the distinction between “lent” and “given” is decisive. As ASIC’s MoneySmart explains, deprivation rules exist precisely to stop people divesting assets to boost entitlements. A tracker showing a live, repayable balance is your evidence that nothing was deprived.
What if the money is going toward a home deposit?
This is where the stakes rise sharply. Australian lenders require a gift letter or statutory declaration confirming gifted deposit funds are non-repayable, and they typically want the money seasoned in the borrower’s account as genuine savings. A family loan that is repayable must be disclosed and will normally be assessed as a liability.
- Declaring a loan as a gift is fraud. A statutory declaration is false if the parties actually intend repayment, even on informal terms. False declarations are a criminal offence and grounds for the lender to call in the loan.
- Disclosure reduces borrowing capacity. Repayments on a family loan are counted in servicing. Many lenders will refuse an application outright where the entire deposit is borrowed and repayable.
- Seasoning still applies. A lump sum landing a fortnight before settlement attracts scrutiny regardless of its source.
- Joint and several liability. If you go on the loan as a guarantor or co-borrower instead, the lender can pursue you for 100% of the debt — not your notional share.
If you are structuring deposit help, read our guidance on a properly drafted family loan agreement before you sign anything for a bank.
How do you set up a family loan tracker step by step?
Start with a written agreement, then open a dedicated record and update it at every transaction. Keep the loan funds moving through traceable bank transfers with clear references, confirm the balance in writing at least annually, and store the agreement, ledger and correspondence together where an executor could find them.
- Agree the terms in writing before any money moves: amount, interest, repayments, default, death.
- Transfer funds by bank transfer only, with a reference such as “Loan advance 1 of 3”. Never use cash.
- Log every advance and repayment on the day it happens, with the running balance.
- Have the borrower acknowledge the balance in writing each year — an email reply is enough.
- Review annually against the lender’s circumstances: retirement, Age Pension application, or a borrower’s own home purchase.
- Reflect the loan in the lender’s will, so it is forgiven or deducted from that child’s share deliberately rather than by accident.
What else do families most often ask?
The questions below come up in almost every family lending conversation: whether interest is compulsory, how the loan affects a bank application, what happens when the lender dies, and how Centrelink views the arrangement.
Do we have to charge interest on a family loan?
No. Interest-free family loans are perfectly legal in Australia, and there is no minimum rate you must apply — Australia has no equivalent of the US Applicable Federal Rate. Just state the rate expressly, including zero, so there is no later argument that interest was implied or owing.
Will a family loan reduce my child’s borrowing capacity?
Yes. Once disclosed, a repayable family loan is assessed as a liability and its repayments are included in the lender’s servicing calculation. That reduces the maximum a bank will advance. Concealing it to improve servicing is loan application fraud and can void the mortgage.
What happens to the loan if the lender dies?
Unless the agreement or will says otherwise, the outstanding balance becomes an asset of the deceased estate, and the executor is obliged to collect it. Saying explicitly in both the agreement and the will whether the debt is forgiven or offset avoids painful disputes between siblings.
Can Centrelink treat our loan as a gift anyway?
It can, if the arrangement lacks substance — no documentation, no repayments ever made, no realistic prospect of recovery. A signed agreement backed by an updated ledger showing actual repayments is the strongest evidence the money remains a recoverable asset rather than a deprived one.
Where should you go from here?
A family loan tracker is only as good as the agreement sitting behind it. Get the terms down in writing first — amount, interest, repayments, security, what happens on death or default — then keep the ledger current. That combination protects the lender’s capital, the borrower’s credibility with their bank, and the relationship between them.
You can create a written family loan agreement and track every repayment in minutes with Chipkie, so the balance is never in doubt. For anything involving a company, a self-managed super fund, or a deposit for a regulated home loan, speak to a licensed adviser or solicitor before the money moves.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or tax advice. Australian laws and lending criteria vary by state and territory and may change. Always consult a licensed financial adviser, solicitor, or conveyancer before entering into any financial arrangement or property purchase with another party.
