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Edited version of your private ruling
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Ruling
Subject: Donation of art
Question:
Is a deduction allowable in respect of the donation of art work by you and your spouse to a museum overseas?
Answer:
No.
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commences on:
1 July 2011
Relevant facts and circumstances
During the income year you and your spouse made a donation of art work to a museum in an overseas country. The art work was valued by the museum.
Relevant legislative provisions
Income Tax Assessment Act 1997 Division 30
Income Tax Assessment Act 1997 Subdivision 30-B
Income Tax Assessment Act 1997 Subdivision 30-BA
Reasons for decision
Summary
Your donation of art work was not made to a deductible gift recipient (DGR), so a deduction is not allowable for your gift.
Detailed reasoning
Division 30 of the ITAA 1997 deals with the deductibility of gifts. To be deductible a gift must:
· be made to a deductible gift recipient (DGR)
· really be a gift
· be a gift of money or a certain type of property, and
· comply with any relevant gift conditions.
In order for a donor to be able to claim a tax deduction for a gift, the gift must be made to a DGR. The income tax law determines which organisations can receive income tax deductible gifts. They are called DGRs and are either:
· endorsed by the Australian Taxation Office (ATO) or
· listed by name in the tax law.
Therefore, for a gift to be deductible the recipient of the gift must either be a listed or an endorsed gift recipient.
An organisation will be a gift recipient if it is listed in Subdivision 30-B of the ITAA 1997. In your case, the donation of art work was made to the museum overseas, which is not listed as a gift recipient in Subdivision 30-B of the ITAA 1997.
Subdivision 30-BA of the ITAA 1997 deals with the endorsement of entities as DGRs. A review of the Tax Office's DGR register shows that the museum in the overseas country is not endorsed as a DGR organisation for Australian taxation purposes.
Your donation of art work was not made to a listed or endorsed gift recipient (DGR), so the donation is not a deductible gift under Division 30 of the ITAA 1997.
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