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Edited version of private ruling
Authorisation Number: 1011834639118
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Ruling
Subject: Gift and donations
Question 1
Are you entitled to claim a deduction for a donation you intend to make to a Maritime Museum?
Answer
No.
Question 2
Are you entitled to claim a deduction for costs incurred when transporting and presenting the gift to a Maritime Museum?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 2012
The scheme commences on:
1 July 2011
Relevant facts and circumstances
You purchased some ten years ago a shipbuilders plate belonging to an overseas ship that was wrecked in Country A.
You paid a nominal amount.
You determined that the plate is classified under the National Heritage Act and cannot be sold or exported. You are the legal custodian under the Act.
You intend to gift the plate to a maritime museum in the near future.
The gift is voluntary and you receive no benefits in return.
You understand the plate is valued on the international markets.
You intend to obtain a further valuation.
You plan to travel to present the plate to the museum.
Detailed reasoning
Division 30 of the Income Assessment Act 1997 (ITAA 1997) outlines the guidelines for the deductibility of gifts and donations.
Section 30-15 of the ITAA 1997 provides that a gift to any funds or institutions listed is allowable as a deduction in the income year in which the gift is made, provided the gift meets the various conditions of the relevant subsections.
To be able to claim a tax deduction for a gift. It must:
· be made to a deductible gift recipient (DGR)
· be a gift of money or property that is covered by a gift type, and
· be truly a gift.
Deductible gift recipient (DGR)
Only gifts made to a DGR are tax deductible. Division 30 of the ITAA 1997 provides that a taxpayer will be able to claim a deduction for a gift or contribution made during the year to DGR funds.
In your case, the Maritime Museum is a DGR.
A true gift
Taxation Ruling 2005/13 explains what constitutes a gift. The term gift is not defined in the legislation and so for the purposes of Division 30 of the ITAA 1997, it has the ordinary meaning. The courts have described a gift as having the following characteristics and features:
· there is a transfer of the beneficial interest in property
· the transfer is made voluntarily
· the transfer arises by way of benefaction, and
· no material benefit or advantage is received by the giver by way of return.
If a transfer fails one or more of these attributes, the transfer will not be ordinarily considered as a gift.
In your case, your intended donation will meet these characteristics as you intend to transfer the plate to the museum voluntarily, there are no obligations on you to make the donation and the museum would be advantaged by receiving the gift without any material detriment.
Types of gifts that are tax deductible
Section 30-15 of the ITAA 1997 provides that the types of gifts to a DGR can be deductible include:
· money $2 or more
· property purchased during the 12 months before the gift was made
· property valued by the Commissioner at more than $5,000
An item of trading stock
· property under the Cultural Gifts program, or
· gifts of places listed in the Register of the National Estate.
In your case, you intend to donate a ships plate in the near future that was purchased some years ago.
Although the gift of property will be donated to a DGR, you purchased the property some years that has an international valuation of less than $5,000.
The property is not a Cultural Gift or any other deductible gift type for Division 30 of the ITAA 1997 purposes.
Therefore, you are not entitled to a deduction for the donation of the ships plate under section 30-15 of the ITAA 1997.
Travel and accommodation expenses
In order for travel and accommodation expenses to be deductible under section 8-1 of the ITAA 1997, the expenses must have been incurred in the gaining or producing assessable income or necessarily incurred in carrying on a business for the purposes of gaining or producing assessable income.
However, no deduction is allowed for losses or outgoings to the extent to which they are of a capital, private or domestic nature or are incurred in gaining or producing exempt income, or are otherwise prevented from being deductible by a specific provision of the ITAA 1997.
In your case, you would like to personally transport the plate to the museum and attend a planned presentation.
The travel and accommodation expenses that you would incur are considered to be private in nature. Therefore you are not entitled to a deduction under section 8-1 of the ITAA 1997.
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