Edited version of your private ruling

Authorisation Number: 1012592245275

Ruling

Subject: Donations to Deductible Gift Recipients.

Question 1

Are donations to a Relief Fund made via a supermarkets tax deductible?

Answer

No

Question 2

Where a cash payment is made, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction?

Answer

No

Question 3

Where a cash payment is made by credit card, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction?

Answer

No

This ruling applies for the following period:

1 July 2013 - 30 June 2014

The scheme commences on:

1 July 2013

Relevant facts and circumstances

· Donation made to a Relief Fund on behalf of a bushfire appeal via a supermarket.

· Donation made using Credit Card.

· The last four digits of the credit card are printed on the receipt.

· The fund was activated to raise and coordinate donations to support the victims of the fires.

· The fund is an endorsed deductible gift recipient (DGR) under Income Tax assessment Act 1997 (ITAA 1997) section 30.

Relevant legislative provisions

Income Tax assessment Act 1997 (ITAA 1997) section 30

Reasons for decision

Question 1

Are donation made to a Relief Fund on behalf of a bushfire appeal via a supermarket tax deductible?

Summary

Deductions for gifts are claimed by the person or organisation that makes the gift (the donor).

Only certain organisations can receive tax deductible gifts. They are called deductible gift recipients (DGRs).

A deductible gift recipient (DGR) is an organisation that is entitled to receive tax deductible gifts. DGRs are: listed by name in the tax law, or endorsed by the Tax Office.

To be tax deductible, a gift to a DGR must satisfy the conditions contained at Item 1 of section 30-15 of the ITAA97. Specifically, the gift must be

· made to an entity that has been endorsed as a DGR

· a gift of money, property, trading stock or shares in a listed public company

· and be more than $2 in value.

Conclusion

In the information you supplied you stated that you donated to a Relief Fund, however the receipt supplied to you indicates that you donated to a Bushfire Appeal. The Bushfire Appeal is not an endorsed DGR under section 30-15 of the ITAA97

You donated an amount of money via a supermarket to a Bushfire Appeal. This is not an endorsed DGR and therefore donations made are not tax deductible.

Question 2

Where a cash payment is made, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction?

Summary

If a taxpayer makes a gift/donation to a deductible gift recipient, he/she needs to retain the receipt issued by the deductible gift recipient for substantiation purposes. Subsection 30-228(1) of the ITAA 1997 states that if a DGR issues a receipt for a gift, the receipt must state the name and Australian Business Number (ABN) of the deductible gift recipient and the fact that the receipt is for a gift. The term 'gift' is not defined in the ITAA 1997. For the purposes of Division 30 of the ITAA 1997 the word 'gift' has its ordinary meaning.

Rather than attempting a definition of gift, the courts have described a gift as having the following characteristics and features:

· there is a transfer of money or property

· the transfer is made voluntarily

· the transfer arises by way of benefaction, and

· no material benefit or advantage is received by the giver.

Conclusion

You donated cash to a Bushfire Appeal, you received a receipt, but it does not state the name and ABN of a deductible gift recipient nor the fact that the receipt is for a gift. Therefore it does not have the features necessary to meet the requirements for a deduction under Subsection 30-228(1) of the ITAA 1997.

The receipt does not need to identify you as the donor; however it has not been issued by an endorsed DGR and therefore it is unable to be used as evidence to claim a tax deduction.

Question 3

Where a cash payment is made by credit card, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction?

Summary

If a taxpayer makes a gift/donation to a deductible gift recipient, he/she needs to retain the receipt issued by the deductible gift recipient for substantiation purposes. Subsection 30-228(1) of the ITAA 1997 states that if a DGR issues a receipt for a gift the receipt must state the name and ABN of the deductible gift recipient and the fact that the receipt is for a gift. The term 'gift' is not defined in the ITAA 1997.

For the purposes of Division 30 of the ITAA 1997 the word 'gift' has its ordinary meaning. Rather than attempting a definition of gift, the courts have described a gift as having the following characteristics and features:

· there is a transfer of money or property

· the transfer is made voluntarily

· the transfer arises by way of benefaction, and

· no material benefit or advantage is received by the giver.

Conclusion

You donated money to a Bushfire Appeal using your credit card, and you received a receipt. As previously stated it does not state the name and ABN of a deductible gift recipient and the fact that the receipt is for a gift. Therefore it does not have the features necessary to meet the requirements to be able to claim a deduction under Subsection 30-228(1) of the ITAA 1997.

The receipt does not need to identify you as the donor; however it has not been issued by an endorsed DGR and therefore it is unable to be used as evidence to claim a tax deduction.