• When supporters can claim

    Your donors and contributors can claim a tax deduction for most gifts and contributions on the tax return for the income year they made the gift or contribution.

    Example – Claiming in the donation year

    Rebekah donates cash to a DGR on 10 August 2014. Rebekah will claim the deduction on her tax return for 2014–15.

    End of example

    Spreading deductions

    A gift cannot add to or create a tax loss. However, donors can choose to spread the tax deduction for a gift over a period of up to five income years if the gift was one of the following:

    • money of $2 or more
    • property we value at more than $5,000
    • property under the Cultural Gifts Program
    • a heritage gift.

    Find out about:

    Gift types

    Donors may want to make an election to spread tax deductions over multiple years because:

    • otherwise they may have a tax loss that prevents them claiming the whole amount
    • they earn a higher income in some years than others, so they will get a higher deduction.

    If your donor chooses to spread a deduction:

    • they make sure the benefit of the deduction is not reduced or lost in years of low taxable income or when the deduction would add to or create an income tax loss
    • the election must be in the approved form and must be made before lodging the tax return for the year in which the gift was made
    • the election must start in the year the gift was made and can continue up to four of the years immediately following
    • the election must contain the percentage to be claimed each year, and the percentage does not need to be the same for each year, but the total percentage must not exceed 100% over the years
    • the election and variation forms vary depending on the gift and the DGR that receives it, so donors should contact the relevant department before making the gift
    • and they donated property valued by us at more than $5,000 to a heritage or environmental DGR, they must contact the Department of the Environment first
    • and they donated property under the Cultural Gifts Program they must complete the approved form and send it to the Ministry of the Arts before they lodge their tax return.

    Donors can vary the percentage claimed in a year for tax returns that have not lodged. The variation must be in an approved form and must be made before they lodge the first tax return the variation applies to.

    Next steps:

    • If your donor donated property we value at more than $5,000 to heritage or environmental DGRs and they want to spread the deduction, they should visit the website of the Department of the Environment and refer to Apportionment of deductionsExternal Link.
    • If your donor donated property under the Cultural Gifts Program and they want to spread the deduction, they complete the Apportionment Election form on the Ministry for the Arts website.
    • If your donor donated to a heritage DGR and they want to spread the deduction, they should visit the website of the Department of Environment and refer to Apportionment of deductionsExternal Link.
    • If your donor chooses to spread a deduction for another type of donation, complete an Election to spread gift deduction form.

    Example 1A deductible gift cannot add to or create a tax loss

    Dominic donated $10,000 to a DGR in June 2014. His assessable income on his tax return for 2013–14 is $20,000 and he has no other deductions.

    The tax deduction he can claim for his gift is limited to $1,800. This is because a deductible gift cannot add to or create a tax loss.

    Therefore, Dominic's taxable income becomes nil and he can't carry forward the excess $8,200 from his gift to a later tax return as a tax loss. If Dominic had completed an Election to spread gift deduction form before he lodged his tax return, he could have claimed for the deduction over several years.

    Example 2Varying a spread of deductions

    Sarah donates a painting under the Cultural Gifts Program to a public art gallery in April 2012. The first income year she can claim a gift deduction in is 2011–12.

    She reviews her income for the current and future years and decides to apportion her deduction as follows:

    • 2011–12 she claims 50%
    • 2012–13 she claims 15%
    • 2013–14 she claims 15%
    • 2014–15 she claims 20%.

    She sends her copy of the election to the Administrator at the Department of Prime Minister and Cabinet, Office for the Arts before lodging her tax return for 2011–12.

    In July 2014, she decides to claim the rest of her deduction on her 2013–14 tax return. Before she lodges that tax return, she must send a copy of the variation to the Department of the Prime Minister and Cabinet, Office for the Arts indicating the claim made in previous years and the new apportionment:

    • 2011–12 she claims 50%
    • 2012–13 she claims 15%
    • 2013–14 she claims 35%
    • 2014–15 she claims 0%
    End of example
    Last modified: 14 Oct 2015QC 46282