Taxation Determination

TD 92/110

Income tax: is the cost of attending a fundraising function tax deductible as a gift?

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FOI status:

may be releasedFOI number: I 1212772

1. The cost of attending a fundraising function is not deductible under the gift provisions of section 78 of the Income Tax Assessment Act 1936 if a material benefit is received. An amount is only deductible if the money or property donated amounts to a 'gift'.

2. For a transaction to amount to a 'gift', the money or property must be transferred voluntarily and the donor must not receive an advantage of a material character in return. A donor would not be taken to have received a material benefit if, in acknowledgement for making a donation, the donor is given something of trifling or insubstantial value such as a sticker or plastic lapel badge.

Note:

1)

Donors should keep receipts for any gifts which they wish to claim as a tax deduction.

2)

There may be cases where a donor may be able to claim some part of the contribution as advertising or promotion expenses incurred in running his or her business.

Examples:

1.

A person attends a '$100 a plate dinner'. Whether or not the subscription exceeds the cost of the meal, the person has received a material benefit in exchange for the purchase price of the ticket. No part of the $100 is tax deductible.

2.

A person attends a fundraising dinner and pays $20 which is for the cost of the meal. Later, the 'hat is passed around' by the organisers and the person contributes $2 or more towards the particular charity. The $20 cost of the meal is not deductible. However, a contribution of $2 or more would be deductible as a gift providing the charity satisfies the requirements of section 78. Had the person got a benefit for his or her contribution, e.g. participated in an auction and purchased an item with the contribution, no deduction would be available.

Commissioner of Taxation
01/07/92

References

ATO references:
NO 88/626-2

Related Rulings/Determinations:

IT 2071,
2443

Subject References:
fundraising functions;
gifts

Legislative References:
ITAA 78

Case References:
FCT v McPhail
(1968) 117 CLR 111