• When can I claim?

    As a donor you can claim a tax deduction for most gifts and contributions in the income year you made the gift or contribution.

    You need to be aware that the tax deduction claimed for donating a gift cannot add to or create a tax loss. The deduction can reduce your assessable income to nil in the tax year in which the gift is made, but any excess cannot be claimed in that year. 

    However, in advance of lodging your tax return, you can choose to spread the tax deduction over a period of up to five income years. You may choose to do this because:

    • you may not be able to claim the whole amount in the current year
    • you earn a greater income in some years than others.

    You can choose to spread the tax deduction over a period of up to five income years if the gift was one of the following:

    • money of $2 or more
    • property we value at more than $5,000
    • property under the Cultural Gifts Program
    • a heritage gift.

    For gifts of money of $2 or more, or property valued by us at more than $5,000, you can use the Election to spread gift deduction form.

    There are different forms for you to use if you are spreading your deduction and your gift is property under the Cultural Gifts Program or a heritage gift: 

    • If you donated property valued by us at more than $5,000 to a heritage or environmental DGR, you must contact the Department of the Environment and Energy before lodging your tax return.
    • If you donated property under the Cultural Gifts Program you must complete the approved form and send it to the Department of Communications and the Arts before you lodge your tax return.

    Other conditions

    • The election must be in the approved form and must be made before lodging the tax return for the year in which the gift was made.
    • The election must start in the year the gift was made and can continue up to four of the years immediately following.
    • The election must contain the percentage to be claimed each year, and the percentage does not need to be the same for each year, but the total percentage must not exceed 100% over the years.

    Next steps:

    Example 1 – A deductible gift cannot add to or create a tax loss

    Dominic donated a car valued by the ATO at $10,000 to a DGR in June 2016. His assessable income on his tax return for 2015–16 is $20,000 and he has no other deductions.

    The tax deduction he can claim for his gift is limited to $1,800. This is because a deductible gift cannot add to or create a tax loss.

    Therefore, Dominic's taxable income becomes nil and he can't carry forward the excess $8,200 from his gift to a later tax return as a tax loss.

    Note that if Dominic had completed an Election to spread gift deduction form before he lodged his tax return, he could have claimed the deduction over several years.

    End of example
    Last modified: 25 Jul 2017QC 46282