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Edited version of private advice
Authorisation Number: 1051875919251
Date of advice: 29 July 2021
Ruling
Subject: Tax deductible gifts - 'in kind services' provided by volunteer
Question
Can a deductible gift recipient (DGR) treat in-kind services provided by volunteers as gifts under section 30-15 of the Income Tax Assessment Act of 1997 (ITAA 1997)?
Answer
No.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commences on:
1 July 2000
Relevant facts and circumstances
The entity is a charity registered with the Australian Charities and Not-for-profits Commission and endorsed as a DGR.
A donor requests to donate their time as a volunteer to the DGR.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 30-15
Reasons for decision
Unless otherwise stated, all legislative references are to the ITAA 1997.
Item 1 of the table in section 30-15 provides that a donor can claim a deduction for a gift of money or property to a DGR.
Taxation Ruling TR 2005/13 Income tax: tax deductible gifts - what is a gift (TR 2005/13) explains what a gift is for the purposes of the gift deduction provisions in Division 30.
Paragraph 21 of TR 2005/13 states that the provision of services to a DGR by a volunteer does not constitute a gift, as the ordinary meaning of property does not include services. The paragraph further states that any expenditure incurred by the volunteer in the course of providing the unpaid services does not constitute a gift.
Paragraph 82 of TR 2005/13 explains that services that are provided to a DGR by volunteers are not tax deductible as there is no transfer of property involved, likewise, any expenses borne by the volunteer in the course of providing the services to the DGR are not deductible as gifts as there is no transfer of property to the DGR.
Paragraph 85 of TR 2005/13 contains the following example:
Example 14
S works as an accountant for a registered tax agent, where her work is charged at $70 per hour. She also maintains a DGR's books on a volunteer basis, spending four hours each fortnight. She cannot claim a tax deduction for $280 per fortnight, being the four hours at her accountancy charge rate of $70. The notional 'expenditure' is not a tax deductible gift; she has not transferred any property to the DGR.
In the present case, the entity is an endorsed DGR so is covered by Item 1 of the table in section 30-15. A donor requests to donate their time as a volunteer to the DGR.
A donation of a service, including a volunteer's time, is not tax deductible as no money or property is transferred to the DGR.
Therefore, the DGR cannot treat in-kind services provided by volunteers as gifts under section 30-15 and accordingly, cannot issue a deductible gift receipt to a donor for in-kind services they provide as a volunteer.