1051584599852 | Legal database

Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private advice

Authorisation Number: 1051584599852

Date of advice: 24 September 2019

Ruling

Subject: Income tax - assessable income

Question

Are the donations you receive assessable income?

Answer

This ruling applies for the following periods:

Year ended 30 June 20XX

The scheme commences on:

20XX

Relevant facts and circumstances

You are a non-profit company that receives donations that are given voluntarily by the public.

You have provided details relevant to the arrangement.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-1

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 6-10

Reasons for decision

All references made in these reasons for decision are to the Income Tax Assessment Act 1997 unless otherwise stated.

The donations would be assessable income under subsection 6-1(1) if they were either ordinary income under section 6-5 or statutory income under section 6-10.

Income from rendering personal services, from property and from carrying on trading activities is ordinary income.

To determine whether a donation is assessable as ordinary income, it is necessary to establish whether it is a gift, and what the character of the gift is in the hands of the recipient.

If the donation is not ordinary income, it is also necessary to consider whether it is included as statutory income by way of one of the provisions as listed in section 10-5.

Guidance on what constitutes a gift is provided in Taxation Ruling TR 2005/13 Income tax: tax deductible gifts - what is a gift.

Guidance on when a gift may constitute income is provided in Taxation Ruling IT 2674 Income tax: gifts to missionaries, ministers of religion and other church workers - are the gifts income?

The donations you receive are not assessable income on the basis that:

· they are not income from the carrying on of a business or trading activity or derived for a profit making purpose,

· they are gifts as they are voluntary, arise by way of benefaction and the donor does not receive a material benefit or advantage in return, and

· they are not related to any income producing activity of the recipient.

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).