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Claiming a tax deduction for Gifts/Donations

Make absolutely sure that you are donating to an organisation that is entitled to tax deductible gifts; these are referred to as ‘deductible gift recipients’ (DGRs). You can check if an organisation is a DGR by using the ABR’s ABN Search here https://abr.business.gov.au/ .

You are fully entitled to claim a tax deduction for gifts and donations made to a DGR organisation, but ultimately it is the responsibility of the individual making a donation confirm that they are donating to a DGR and to ensure they retain a receipt for donations made.

A valid tax deduction for a gift must meet four conditions:

  1. The gift must be made to a DGR (deductible gift recipient).
  2. The gift must truly be a gift. A gift is voluntary transfer of money or property where you receive no material benefit or advantage
  3. The gift must be money or property, which includes financial assets such as shares
  4. The gift must comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting types of deductible gifts they can receive.

What you can’t claim:

You cannot claim gifts or donations that provide you with a personal benefit, such as:

  1. raffle or art union tickets
  2. items such as lollies or stationery
  3. the cost of attending fundraising dinners, even if the cost exceeds the value of the dinner
  4. membership fees
  5. payments to school building funds made, for example, as an alternative to an increase in school fees
  6. payments where you have an understanding with the recipient that the payments will be used to provide a benefit to you.

Our suggestion:

At the beginning of each financial year, sit down and consider which organisations you want to donate to and carefully consider your options:

  • Are they a registered DGR – Search the ABN to make sure.
  • Are you receiving any consideration for you donation (raffle tickets etc.) – If so it is not a deductible payment.

Once you are content to make the donation go ahead, making sure to retain your receipts and any other relevant paperwork!