Shares valued at $5,000 or less
You may be able to claim a tax deduction if you donate to a deductible gift recipient (DGR):
- listed shares valued at $5,000 or less, and
- you acquired the shares at least 12 months before you donated them.
Additionally, to meet the requirements of this gift type:
- the shares must be in a listed public company.
- when you donated the shares they were quoted on the Australian securities exchange (shares must not be suspended from trading or removed from the Australian securities exchange list).
If your shares are valued at more than $5,000, or you acquired them within 12 months of donating them, you may be eligible for deductions under different gift types.
Shares that were not purchased
Under this gift type, you can acquire the shares through a variety of means, including shares you have purchased, inherited, won, or received as a gift or a bonus.
How much can I claim?
You can claim a tax deduction of the market value of the shares, if that value is more than $2 but not more than $5,000.
The market value is the value of the shares as listed on Australian securities exchange on the day you donate them.
Shares in different companies donated at the same time are treated as separate donations.
Example 1 – Gifting two parcels of shares
Tim wants to donate to a DGR $3,000 worth of shares in Red Ltd and $4,000 worth of shares in Blue Ltd, both listed public companies. He purchased both of these parcels of shares more than 12 months ago. Tim signs and submits two share ownership transfer forms.
Although their combined value is more than $5,000, Tim can still claim a deduction for the donation of the shares under this gift type as they are treated as separate gifts each valued at $5,000 or less.
End of example
Example 2 – Holding shares for more than 12 months
Fiona purchased a parcel of 100 shares in an Australian-listed public company on 5 August 2004. On 15 January 2014, Fiona donated the parcel of shares to a DGR. The market value of the shares on 15 January 2014, as listed on the approved stock exchange, was $4.50 per share.
Fiona has donated shares in an Australian-listed public company that she purchased more than 12 months before donating them. Fiona can claim a deduction of $450 (that is, the market value of the shares on the day she donated them to the DGR) in the income tax year ended 30 June 2014.
End of example
If a donor makes a gift of listed shares valued at $5,000 or less within 12 months of acquiring them, they may be able to claim a tax deduction.
Example 3 – Donating shares held for different periods
Steven holds shares in a listed public company. He has held these shares for more than 12 months. Under a dividend reinvestment scheme, Steven purchased a further $480 in shares in the company.
Steven donates all his shares in the company to a DGR within 12 months of purchasing the shares with the dividend. At the time the shares held for more than 12 months were valued at $4,000 and the shares purchased with the dividend were valued at $500.
If the deduction does not add to or create a tax loss, Steven can claim a tax deduction of $4,480, being:
End of example
- $4,000 for the shares held for more than 12 months
- $480 for the shares he purchased in the last 12 months.