Edited version of your written advice

Authorisation Number: 1013012933264

Date of advice: 11 May 2016

Ruling

Subject: Deductions

Question and answer

1. Are you entitled to claim a deduction for an in-kind donation made to deductible gift recipient (DGR), where you purchased the goods during the 12 months before making the gift?

Yes.

2. Are you entitled to a deduction for your travel expenses to and from the place to be a volunteer?

No.

This ruling applies for the following periods:

Year ended 30 June 2016

The scheme commenced on:

1 July 2015

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

During the # year you donated goods to the value of $ to the DGR.

The goods donated consisted of food supplies and cleaning supplies.

You have kept receipts for the goods purchased.

The DGR can provide a donation receipt if required.

You travel to the place to assist (as a volunteer) with daily operations.

You have travelled to the place on X separate occasions. The place is Y kms from your home and you travel directly there and back.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 30-15

Income Tax Assessment Act 1997 Subsection 30-45

Income Tax Assessment Act 1936 Subsection 78A(2)

Income Tax Assessment Act 1936 Paragraph 177D(a)

Reasons for decision

Division 30 of the Income Tax 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:

1) be made to a deductible gift recipient (DGR)

2) be a gift of money or property that is covered by a gift type, and

3) be truly a gift.

1) 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 nominated funds (including prescribed private funds), authorities, institutions or specified persons.

The Organisation is an endorsed DGR.

2) Be a gift of money or property that is covered by the gift type

Section 30-15 of the ITAA 1997 requires that a gift of property be purchased by you during the 12 months before making the gift.

Property has a wide meaning. As well as physical things, it includes rights and interests that are capable of ownership and have a value. We consider that the goods you have donated meet this definition of property.

Your donations will meet this condition where you purchase the goods during the 12 months preceding making the gift to the DGR and you can deduct the amount you paid for the property (supplies).

3) A true gift

Taxation Ruling TR 2005/13 explains what constitutes a gift. The term gift is not defined in the ITAA 1997 and so for the purposes of Division 30, it has its ordinary meaning. The courts have described a gift as having the following characteristics and features:

(a) there is a transfer of money or property

(b) the transfer is made voluntarily

(c) the transfer arises by way of benefaction, and

(d) 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 donation will meet these characteristics as you transferred the goods to the DGR voluntarily, there was no obligation on you to make the donation and the DGR was advantaged by receiving the gift without any material detriment.

You can claim a deduction for all purchases made in the # financial year. If you make a purchase in the same financial year but do not gift it until after the end of the financial year, you can still claim that amount in your # return.

Travel expenses

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

In your case your expenses are not incurred in connection with earning assessable income as you are a volunteer. Therefore, you are not entitled to a deduction for your travel expenses.