| Disclaimer 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: 1052271006716
Date of advice: 8 July 2024
Ruling
Subject: Assessable income
Question
Are the support donations you receive from donors while undertaking a course of education assessable income?
Answer
No.
Based on the information provided to the Commissioner the support donations you may receive while undertaking the course of education won't be assessable income under Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) as they will not be received in relation to the carrying on of work within the organisation.
The relevant Taxation Ruling provides 'Whether a gift is assessable income depends on the quality or the character of the gift in the hands of the recipient'. Sub-paragraphs (a) 'how, in what capacity, and for what reason the recipient received the gift'; and (g) 'whether the recipient relies on the gift for regular maintenance of himself or herself and any dependants.
The Taxation Ruling provides that occasional gifts received for the individual's upkeep and support are not assessable income because they have no connection with any employment.
The donations/gifts received by you while studying will not be assessable.
Question 2
Will the support donations received by you from donors be assessable when you resume part-time work?
Answer
Yes.
The support donations you receive while undertaking part-time work within the organisation will be assessable income under Section 6-5 of the ITAA 1997 as they will be received as part of that work.
The Taxation Ruling provides 'Whether a gift is assessable income depends on the quality or the character of the gift in the hands of the recipient'.
This ruling applies for the following periods:
Year ending 30 June 2025
Year ending 30 June 2026
Year ending 30 June 2027
The scheme commenced on:
1 July 2024
Relevant facts and circumstances
You have been employed for a number of years.
Your employment will cease in the near future.
You will begin a course of study.
This will be undertaken on a full-time basis without any paid employment.
It is common with these roles, donations or 'support' raising is undertaken by employees of organisations to fund their employment costs.
Individuals in the community with aligned beliefs/interests voluntarily transfer funds to the organisation which the organisation uses for employment and administration costs.
Once you leave your current organisation, some current supporters, under no obligation or in response to any connection with your current employer, may wish to continue to transfer you funds to support the costs of your study/family upkeep.
You have contacted your supporters and advised them of your resignation and advised that they may wish to cease making payments to the organisation, choose another worker to support in the organisation, or alternatively can consider redirecting their funds to you personally to assist with family finances while you are studying.
You do not expect that these gifts will exceed the tax-free threshold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
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).
