Edited version of private advice

Authorisation Number: 1051847486932

Date of advice: 9 June 2021

Ruling

Subject: Gift donations

Question 1

Were the essential characteristics of a gift for the purposes of claiming a deduction under Division 30 of the Income Tax Assessment Act 1997 (ITAA 1997) present in relation to the taxpayer's donation of:

1. Lot A
2. Lot B

Answer

Yes

Question 2

Were the essential characteristics of a gift for the purposes of claiming a deduction under Division 30 ITAA 1997 present in relation to the taxpayer's donation of Lot C

Answer

No

Question 3

Would your donations meet the requirements for deductibility under Division 30 ITAA 1997 in relation to the donations of:

1. Lot A
2. Lot B

Answer

Yes

Question 4

Would your donations meet the requirements for deductibility under Division 30 ITAA 1997 in relation to the donations of Lot C?

Answer

No due to answer to Question 1

Question 5

When were you deemed to have been made your donations of Lots A, B and C?

Answer

At the date of registration with the state Land Titles Office

Question 6

Does the existence of the Nature Refuge Covenant preclude your donations of Lots A, B and C from deductibility under section 78A Income Tax Assessment Act 1936 (ITAA 1936)?

Answer

No, except Lot C is already denied deductibility based on the answer to Question 1.

Question 7

Do the terms of the Deed of Gift relating to the establishment of the Foundation preclude the donations from deductibility under section 78A ITAA 1936?

Answer

No, except Lot C is already denied deductibility based on the answer to Question 1.

Question 8

Does the existence of the Occupation Licence on one land title under the terms of the Deed of Gift preclude the donation of Lot C from deductibility under section 78A of the ITAA 1936?

Answer

Yes

Question 9

Can you claim a reduced deduction for the value of Lot C excluding the value of the Occupation Licence?

Answer

No

Question 10

Can you treat each of the donated titles as a separate donation for the purposes of determining deductibility?

Answer

Yes

This ruling applies for the following periods:

•      Year ended 30 June 20XX

•      Year ended 30 June 20XX

•      Year ended 30 June 20XX

•      Year ended 30 June 20XX

•      Year ended 30 June 20XX

The scheme commences on:

1 July 2020

Relevant facts and circumstances

You acquired three land titles between the 1990's and early 2010's.

Lot A was purchased in early 2010's.

Lots B and C were purchased in the 1990's

You have at all times up until XX XXXX 2018 been the registered proprietors of the property.

Between the time of the acquisition and the transfer date, you used the property to operate a farming enterprise.

You subsequently entered into an agreement with the X Trust on the transfer date to donate all of your interests in the property under a Deed of Gift. Per clause X of the deed, you irrevocably assigned each of the your rights, title and interests in relation to the property to the X Trust.

The Transfer Date as defined in the Deed means the date upon which the Real Property transfers are registered with the State Land Titles Office which in this case was XX XXXX 20XX.

In addition to the above, the Deed included a number of 'Agreed Terms' ("the Terms") which had the following effects:

1.    The Nature Refuge Covenant" - over Lots A, B and C;

2.    The X Trust would establish the Foundation' ("the Foundation")

3.    The X Trust would grant the taxpayers an 'Occupation Licence' ("the Licence") -over the house and curtilage of Lot C.

You both do not receive any benefit or payment from the Foundation.

You engaged a valuer to conduct a valuation of the property

The deed was signed by both parties on XX XXXX 2018.

The transfer of titles were registered with the State Land Titles Office on XX XXXX 2018.

The X Trust is endorsed by the Commissioner as a deductible gift recipient.

The X Trust is an Australian resident for taxation purposes.

QTFN was established independently of National Trust Australia (State A) Limited. Lot C is also not listed under:

a.    National Heritage List;

b.    Commonwealth Heritage List; or

c.     Register of the National Estate.

Relevant legislative provisions

Income Tax Assessment Act 1997 Division 30

Income Tax Assessment Act 1997 section 30-15

Income Tax Assessment Act 1997 subsection 30-15(1)

Income Tax Assessment Act 1997 section 30-17

Income Tax Assessment Act 1997 subsection 30-17(1)

Income Tax Assessment Act 1997 subsection 30-17(2)

Income Tax Assessment Act 1997 Subdivision 30-BA

Income Tax Assessment Act 1997 section 30-220

Income Tax Assessment Act 1936 section 78A

Income Tax Assessment Act 1936 subsection 78A(1)

Income Tax Assessment Act 1936 subsection 78A(2)

Income Tax Assessment Act 1936 paragraph 78A(1)(a)

Income Tax Assessment Act 1936 paragraph 78A(1)(b)

Income Tax Assessment Act 1936 paragraph 78A(1)(c)

Income Tax Assessment Act 1936 paragraph 78A(1)(d)

Income Tax Assessment Act 1936 subsection 78A(3)

Income Tax Assessment Act 1936 subsection 78A(5)

Reasons for decision

Summary

The donations of Lots A and B will constitute a gift. The donation of Lot C will not constitute a gift or contribution.

The donations meet the requirements of Division 30 except for Lot C as that is not a gift or contribution for the purpose of Division 30 Income Tax Assessment Act 1997 (ITAA 1997).

The timing of the deductions is when the transfers were registered with the State Land Titles Office.

The properties will be treated as three distinct properties for the purposes of deductibility.

If the donation of Lot C did constitute gift or contribution, the donation of Lot C will be denied a deduction under Division 30 of the ITAA 1997 due to the operation of section 78A of the Income Tax Assessment Act 1936 (ITAA 1936).

Detailed reasoning

Division 30 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the types of non-testamentary gifts (to the value of $2 or more) to a Deductible Gift Recipient (DGR) that can be deductible include:

         •            money;

         •            property (including trading stock) purchased during the 12 months before the gift was made;

         •            property valued by the Commissioner at more than $5,000;

         •            an item of trading stock disposed of outside the ordinary course of business;

         •            property under the Cultural Gifts Program; or

         •            gifts of places listed in the register of the National Estate.

Gift

As the meaning of the term 'gift' or 'contribution' is not defined in income tax legislation, it is necessary to consider the relevant case law pertaining to these terms.

In the case of FC ofT v McPhail (1968) 117 CLR 111; (1968) 10 AITR 552; (1968) 15 ATD 16 (McPhail's case), it was established that to constitute a gift or contribution:

'it must appear that the property transferred was transferred voluntarily and not as the result of a contractual obligation to transfer it and no advantage of a material character was received by the transferor by way of return.'

Generally, it is considered that a taxpayer is entitled to a deduction for a gift or contribution that they make to an endorsed gift recipient (i.e. a fund, authority or institution that satisfies the requirements of Division 30) where:

•         it is a monetary gift or contribution of $2 or more (section 30-15 and the Explanatory Memorandum to the Tax Law Improvement Act 1997 (EM));

•         it is a voluntary gift or contribution (it did not arise from a contractual obligation); and

•         the donor does not receive any material advantage in respect of their gift or contribution.

Further guidance on the meaning of the term gift is provided in Taxation Ruling TR 2005/13 Income tax: tax deductible gifts - what is a gift. Paragraph 13 of TR 2005/13 provides that 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 the beneficial interest in property;

•         the transfer is made voluntarily;

•         the transfer arises by way of benefaction; and

•         no material benefit or advantage is received by the giver by way of return.

Therefore, in determining whether a transfer of property amounts to a gift, it is necessary to consider the whole set of circumstances surrounding the transfer. This may include consideration of parties other than the giver and the deductible gift recipient. In doing so, it is the substance and reality of the transfer that is required to be ascertained, as such it is necessary to take into account those acts, transactions, arrangements and circumstances that provide the context and the explanation for the transfer (paragraph 15 of TR 2005/13).

Transfer of beneficial interest in property

In applying the guidelines provided by TR 2005/13 to the present circumstances, it is considered that the donation involves the transfer of property from you to the X Trust. As noted by Turner LG in Milroy v Lord 13 (1862) 45 ER 1185, for a gift to be valid and effectual:

'the giver must have done everything which was necessary to be done in order to transfer the property and render the settlement binding upon him.'

There is a transfer of beneficial interest from you to the X Trust when the properties were formally transferred into the name of the X Trust

Transfer is made voluntarily

In order to be a gift, the transfer of the property must be made voluntarily. As noted in Cyprus Mines Corporation v FCT (1978) 9 ATR 33, a transfer will be voluntary if:

'it is the act and will of the disponor and there was nothing to interfere with or control the exercise of that will'.

The circumstances indicate that you made the transfers voluntarily.

Transfer arises by way of benefaction

The transfers of the property must also be a conferral of benefaction. Deane J in Leary v FCT (1980) 11 ATR 145 explained:

'the recipient should be advantaged in a material sense and without any countervailing material detriment arising from the circumstances of the transfer, to the extent of the property transferred.'

The X Trust has accepted the donation, so the land be used for an environmental purpose. The X Trust will be conferred an advantage, being the receipt of the land and there will be no countervailing detriment.

No material benefit or advantage is received by the giver in return

As noted in McPhail's case, the receipt of any material benefit by way of return to the giver will disqualify the transfer as a gift.

For Lots A and B, you receive no material benefit or advantage in return for the providing of the properties to QTFN. However, for Lot C, you obtain use of part of the land through the Occupation Licence granted. You have argued that the benefit received is minor compared with the overall value of the donation. However, a material benefit is still provided to you from providing the land, which is your use of the donated property.

Therefore, there is a material benefit or advantage received meaning that the donation of Lot C cannot be a gift.

Therefore, in accordance with TR 2005/13, it is considered that the donation made by you to the X Trust of Lots A and B satisfies the required attributes of a gift. Lot C does not satisfy the required attributes of a gift.

Timing of gift

Paragraphs 61-63 of TR 2005/13 detail when the transfer of the gift takes place:

61. The making of a gift to a DGR involves the transfer of money or property to that DGR: section 30-15 of the ITAA 1997. In the simplest cases this involves the delivery of money (cash, cheque or electronic transfer of funds) or goods to the DGR.

62. In each case it is necessary to ascertain whether a transfer has occurred, what property has been transferred, and when the transfer took place. This is to ensure that ownership of identifiable property has been divested and has been transferred to the DGR (c.f., Re Rose (dec'd); Rose v. Inland Revenue Commissioners [1952] 1 All ER 1217).

63. In Milroy v. Lord, Turner LJ said that for a gift to be valid and effectual, the giver:

must have done everything which according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him.

Further detail is contained in paragraph 77 of TR 2005/13 which is set out below:

Full title to be received by the DGR upon transfer

77. Upon the transfer, the DGR must receive full title, custody and control of the property transferred, so that the DGR is entitled to deal with the property in its own right to the entire exclusion of the giver. Subsection 78A(3) extends the exclusion to include the giver's associate.

Example 11

78. In December 2003 M executes a deed of gift in favour of a DGR, under which he binds himself to give it $10,000 on 1 January 2007. Because there is only a promise, albeit under deed, the $10,000 has not been transferred to the DGR in December 2003.

In this situation, a deed of gift was executed on XX XXXX 2018. The deed states that the transfer date will be the date when the Real Property transfers are registered with the state Land Titles Office.

The legal and equitable ownership of the property did not pass until the property was registered with the State Land Titles Office on XX XXXX 2018. That is the date that the transfers occurred.

Other requirements of Division 30 ITAA 1997

Section 30-15 ITAA 1997 provides that a gift is deductible if the requirements set out under one of the items in the table are met.

The X Trust is endorsed by the Commissioner as a DGR under Subdivision 30-BA of the Act. Item 1 of the table applies to the DGR. A gift of property was made which is one of the accepted forms of gifts.

For the gift to be deductible, the special conditions outlined in item 1 to the table in section 30-15 ITAA 1997 must also be satisfied.

Special conditions

a)    the fund, authority or institution must be in Australia

The X Trust is in Australia, so this requirement is met

b)    the fund, authority or institution must either meet the requirements of section 30-17 or be mentioned by name in the relevant table item in Subdivision 30-B

The X Trust meets the requirements of section 30-17

c)    the value of the gift must be $2 or more

The value of the gift is more than $2

d)    any conditions set out in the relevant table item in Subdivision 30-B must be satisfied

No extra conditions need to be satisfied

e)    if the property is to be valued by the Commissioner - the requirements of section 30-212 are satisfied

We have been asked to assume that these will be satisfied for the purpose of the ruling

Therefore, the gifts of Lot A and B will be deductible unless section 78A of the Income Tax Assessment Act 1936 (ITAA 1936) operates to deny deductibility.

As determined above, the donation of Lot C will not be gift. However, as an alternative argument, we will assume Lot C is a gift for the purpose of providing analysis of section 78A ITAA 1936.

Section 78A ITAA 1936

In certain circumstances the gift anti-avoidance provisions of section 78A of the ITAA 1936 may operate to deny an income tax deduction ordinarily allowable under Division 30 of the ITAA 1997.

Section 78A of the ITAA 1936 applies if:

• the amount or value of the benefit derived by the DGR as a consequence of the gift is, or will be, or may reasonably be expected to be, diminished subsequent to the receipt of the gift (paragraph 78A(2)(a) of the ITAA 1936);
• another fund, authority or institution, other than the recipient DGR makes, or becomes liable to make, or may reasonably be expected to make a payment, or transfer property to any person or incur any other detriment, disadvantage, liability or obligation (paragraph 78A(2)(b) of the ITAA 1936);
• the giver or the giver's associate obtains, or will obtain, or may reasonably be expected to obtain any benefit, advantage, right or privilege apart from the benefit of a tax saving associated with the gift deduction (paragraph 78A(2)(c) of the ITAA 1936); or
• the recipient DGR or another fund, authority or institution acquires property, directly or indirectly, from the giver or the giver's associate (paragraph 78A(2)(d) of the ITAA 1936).

Under subsection 78A(3) ITAA 1936, a donation of property may not be deductible where the donor retains the right to use the donated property:

Without limiting the application of subsection (2), where the terms and conditions on which a gift of property other than money is made are such that the fund, authority, institution or personto which the gift is made does not receive immediate custody and control of the property, does not have the unconditional right to retain custody and control of the property in perpetuity to the exclusion of the donor or an associate of the donor or does not obtain an immediate, indefeasible and unencumbered legal and equitable title to the property, paragraph (2)(c) shall be deemed to apply in relation to that gift.

Subsection 78A(5) of the ITAA 1936 provides an 'exception' to subsection 78A(3) ITAA 1936 in some situations. It also highlights the interaction between section 78A ITAA 1936 and section 30-220 ITAA 1997 and section 30-15 ITAA 1997. It states:

This section does not prevent a deduction under section 30-15 of the Income Tax Assessment Act 1997 (because of item 4, 5 or 6 of the table in that section) from being allowed from the assessable income of the donor in respect of a gift of property other than money by reason only that the terms and conditions on which the gift was made are such, or the effect of any arrangement (within the meaning of that Act) entered into in association with the making or receipt of the gift is such, that the value of the gift may be reduced in accordance with section 30-220 of that Act.

In summary, under subsection 78A(5) ITAA 1936 cultural and heritage gifts (under items 4, 5 or 6 in section 30-15 of the ITAA 1997) are excluded from the operation of subsection 78A(3) ITAA 1936. In addition, gifts falling within the categories of item 4, 5 and 6 may be apportioned (per section 30-220 ITAA 1997).

Section 30-15 of the ITAA 1997 provides that a gift is deductible if the requirements set out under one of the items in the table are met.

The table also highlights those gifts allowing for reduced deductions in respect of these kinds of gifts being under certain circumstances (i.e. items 4, 5 and 6).

The application of section 30-15 is explained further in TR 2005/13 paragraph 81:

...DGR receives full title, custody and control of the property upon transfer does not apply to cultural and heritage gifts (items 4, 5, & 6 of the table in section 30-15 of the ITAA 1997). Even though the DGR may not, under the terms and conditions of the gift, have full title, custody or control of the property, section 30-220 of the ITAA 1997, in conjunction with subsection 78A(5) of the ITAA 1936 allows the giver a tax deduction.

TR 2005/13 paragraph 82 states that:

... The provisions are designed to encourage gifts of significant works of art and other items of cultural property to form part of a collection and for preservation through the National Trust of property of national heritage significance. However, the deduction is reduced to reflect the benefit that flows from retaining some rights of custody and enjoyment of the gifted property on the part of the giver.

Likewise, paragraph 229 of TR 2005/13 states:

...Under subsection 78A(5) of the ITAA 1936 cultural and heritage gifts under item 4, 5 or 6 in section 30-15 of the ITAA 1997 are excluded from the operation of subsection 78A(3).

Nature Refuge Covenant

Paragraph 78A(2)(a) ITAA 1936

Paragraph 78A(2)(a) ITAA 1936 applies where the amount or value of the benefit obtained by the donee is reduced, or will be reduced, due to any circumstance, transaction or arrangement associated with the gift.

The X Trust will use the properties for nature refuge purposes. The existence of a nature refuge covenant is in line with these objectives.

A nature refuge covenant would normally have a great reduction in a property value, and it can be accepted it would have one here. However, X Trust was and is going to use the land for the same purposes as the covenant states. Therefore, there would be no reduction in the amount of benefit that the X Trust would derive subsequent to the receipt of the gift.

Paragraph 78A(2)(b) ITAA 1936

Paragraph 78A(2)(b) ITAA 1936 provides that no deduction is available where an entity other than the donee becomes liable to make or may be reasonably be expected to make a payment or transfer of property or incur any other detriment, disadvantage, liability or obligation.

However paragraph 213 of TR 2005/13 states that paragraph 78A(2)(b) ITAA 1936 will only apply where "as a result of the arrangement, the amount or value of the benefit derived as a consequence of the gift is less than the amount or value of the property comprising the gift at the time the gift is made".

This paragraph is not relevant in the circumstances.

Paragraph 78A(2)(c) ITAA 1936

Paragraph 78A(2)(c) ITAA 1936 denies a deduction where, by reason of the circumstances surrounding a donation, the donor or an associate of the donor receives any benefit, advantage, right or privilege other than the benefit of a taxation deduction.

You nor any associate will not receive any benefit in relation to the Nature Refuge Covenant. Therefore, this paragraph does not apply.

Paragraph 78A(2)(d) ITAA 1936

Paragraph 78A(2)(d) ITAA 1936 applies where a gift is made on the basis that the money will be used by the recipient or another fund, authority or institution to acquire property from the donor or the donor's associate.

No other person, fund, institution or authority received any property (other than the donated property itself) as a result of the Nature Refuge Covenant. Therefore, this paragraph does not apply.

Subsection 78A(3) ITAA 1936

The Nature Refuge Covenant itself does not prevent the X Trust from receiving immediate custody and control of the property. They receive their rights in perpetuity to the exclusion of other taxpayers.

There are some restrictions in the use of the land however their rights to own the land are not affected by this Covenant. Therefore, this paragraph does not apply.

Conclusion

Section 78A ITAA 1936 will not apply to deny deductibility of Lots A, B and C in relation to the Nature Refuge Covenant.

Establishment of the Foundation

Paragraph 78A(2)(a) ITAA 1936

The establishment of the foundation will have no impact on the value of the benefit derived by the X Trust. It will merely assist the X Trust with their overall nature goals with the land. Therefore, this paragraph does not apply.

Paragraph 78A(2)(b) ITAA 1936

No payments or property transfers will liable to be made by other entities in relation to the establishment of the Foundation except for the transfer that constitutes the gift. Therefore, this paragraph does not apply.

Paragraph 78A(2)(c) ITAA 1936

There would be no direct benefit to you from the establishment of the Foundation. The benefits of the Foundation would accrue to the X Trust. You don't receive any benefit from the Foundation and do not receive any payment from the Foundation. Therefore, this paragraph does not apply.

Paragraph 78A(2)(d) ITAA 1936

No other person, fund, institution or authority received any property (other than the donated property itself) as a result of the establishment of the Foundation. Therefore, this paragraph does not apply.

Subsection 78A(3) ITAA 1936

The Foundation will not have any control of the land. The X Trust will still have control of the custody and will not delegate this to the foundation. Therefore, this paragraph will not apply.

Conclusion

Section 78A ITAA 1936 will not apply to deny deductibility of Lots A, B and C in relation to the establishment of the Foundation.

Occupation Licence

Paragraph 78A(2)(a) ITAA 1936

The occupation licence will have a reduction in the value of the gift. However, the occupation licence was known to be part of the process prior to the receipt of the gift. Therefore, it cannot be said that it would expect to have an effect on the value subsequent to the receipt of the gift by the X Trust. The subsection requires that the value of the gift will be, or may reasonably be expected to be, less than the amount or value at the time the gift was made. This reduction in value was already known at the time of making the gift. Therefore, this paragraph will not apply.

Paragraph 78A(2)(b) ITAA 1936

No payments or property transfers of any kind referred to in paragraph 78A(2)(b) ITAA 1936 were liable to be made Therefore this paragraph does not apply.

Paragraph 78A(2)(c) ITAA 1936

You will obtain the occupation licence which will allow you to retain access to the land that you previously owned. This is an advantage and right which you would be able to use, and you obtained this right and advantage in connection with the donation of the gift.

There is an argument that this advantage or right is one you already have. However, the wording of this section suggests situations such as this would fall into this paragraph.

Therefore this paragraph is taken to apply.

Paragraph 78A(2)(d) ITAA 1936

No other person, fund, institution or authority received any property (other than the donated property itself) as a result of the Occupation Licence. Therefore this paragraph does not apply.

Subsection 78A(3) ITAA 1936

The occupation licence is a limit on the ability of the X Trust to have immediate custody and control of the property. For a portion of the property, being the house and other areas, there is a significant restriction on the ability for the X Trust to have control. They have to ask permission before using the property.

Therefore subsection 78A(3) ITAA 1936 will apply to deem paragraph 78A(2)(c) ITAA 1936 to apply. This means if in the alternative that the original view in relation to paragraph 78A(2)(c) ITAA 1936 was incorrect above, then the effect of subsection 78A(3) ITAA 1936 would mean that it would be deemed to apply regardless.

Subsection 78A(5) ITAA 1936

Subsection 78A(5) ITAA 1936 defines certain cultural and heritage gifts under items 4,5 and 6 (as per section 30-15 ITAA 1997) are excluded from the operation of subsection 78A(3) ITAA 1936. Therefore, if the donation of Lot C falls into one of those categories, it would prevent operation of section 78A ITAA 1936 whilst also applying section 30-220 ITAA 1997 in 'apportioning' the value of the land to reflect the usage of the giver.

You have stated that the X Trust was established independently of National Trust Australia (State A) Limited. Lot C is also not listed under:

a.    National Heritage List;

b.    Commonwealth Heritage List; or

c.     Register of the National Estate.

The X Trust and Lot C are not within a category listed in items 4,5 and 6. In this instance, the gift is considered an item 1.

As the gift is considered item 1, subsection 78A(5) ITAA 1936 is not available to override the effects of subsection 78A(3) ITAA 1936. Consequently, this also precludes operation of section 30-220 ITAA 1997 (i.e. the application of apportionment where the value of the gift may be reduced). Instead subsection 78A(3) ITAA 1936 applies.

Conclusion

Section 78A of the ITAA 1936 will apply to deny a deduction in relation to the Occupation Licence.

Apportionment of deduction

You want to apportion the deduction for the gift provided to only reflect the portion of the property that is not subject to the Occupation Licence.

The words of subsection 78A(2) ITAA 1936 are as follows:

Subject to this section, a gift of money, or of propertyother than money, made by a person (in this section referred to as the donor ) to a fund, authority, institution or person is not an allowable deduction under Division 30 of the Income Tax Assessment Act 1997

This wording does not provide that a deduction is not allowable to the extent of the act that offended one of the relevant paragraphs. The wording of the section denies the deduction if the gift offends one of paragraphs

This construction is reinforced by the addition of section 30-220 in the ITAA 1997. That section provides the following in relation to certain gifts:

Reducing the amount you can deduct

(1) The amount you can deduct is reduced by a reasonable amount if:

(a) the terms and conditions on which the gift is made are such that the recipient:

(i) does not receive immediate custody and control of the property; or

(ii) does not have the unconditional right to retain custody and control of the property in perpetuity; or

(iii) does not obtain an immediate, indefeasible and unencumbered legal and equitable title to the property; or

(b) the custody, control or use of the property by the recipient is affected by an arrangement entered into in respect of the making of the gift.

(2) In deciding what is a reasonable amount, have regard to the effect of those terms and conditions, or that arrangement, on the GST inclusive market value of the gift.

That section only applies to gifts that fall under items 4, 5 and 6 of the table in section 30-15.

As discussed above in relation to the analysis of subsection 78A(5) ITAA 1936, due to the relevant item being item 1 in section 30-15 ITAA 1997, and not items 4, 5, 6, you do not have access to section 30-220.

There is no other ability to apportion the deduction for the gift. The effect of section 78A of the ITAA 1936 applying is that the total amount of the deduction will not be an allowable deduction under Division 30 of the ITAA 1997.

Separate Lots

Each of the various lots is separate and distinct from the other. Each of them will be treated as separate gifts for the purposes of Division 30 ITAA 1997. This means that only the property subject to the Occupation Licence, being Lot C will be denied deductibility under section 78A ITAA 1936.