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Donations

Australians have been very altruistic in recent weeks, donating millions of dollars to various organisations to assist those impacted by the bushfires. Unfortunately, there have been stories of scammers setting up bogus websites and donation points. For this reason, it’s important to check the veracity of the organization.  One way of doing so is to search the register on the Australian Charities and Not-for-profits Commission website www.acnc.gov.au If an organization is on the register, it will be legitimate. However, if you are donating electronically, you will still need to be satisfied that the website is not fake.   In the case of taxpayers carrying on a business, donations to various organisations that are made for purely business purposes (for example, as a form of advertising) may be deducted in full. This is the case even where the gift or donation is made to a recipient who is not registered as a Deductible Gift Recipient (DGR) with the ATO (see later).   All taxpayers (including individuals, trustees of a trust or superannuation funds, partnerships, companies, residents, and non-residents) are entitled to a deduction for gifts of money or property of $2 or more to nominated funds, authorities, institutions or bodies, or specified persons. However, the claiming of a deduction is subject to the following conditions:  

  • The donation must not be made by will upon death
  • Each donation must be of $2 or more. This may take the form of money, land, personal property, shares etc.
  • You must have evidence of the donation (e.g. receipt)
  • Where property is given, it must be have been purchased by the person making the donation no more than 12 months before the gift was made or be valued by the ATO at more than $5 000, and
  • The recipient of the gift must normally be in Australia (except in the case of overseas aid funds).

  However, a deduction is generally not permitted unless the recipient of the gift/donation a deductible gift recipient (DGR). A full listing of DGRs can be found at www.abn.business.gov.au/DgrListing.aspx   Finally, many families make donations throughout the year. Where this is the case, to maximize the taxation benefit, the higher income earner of the family unit should make the payment and claim it on their income tax return.  

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