Tax Rules on Claiming Donations and Gifts
You can only claim a tax deduction for gifts or donations to organisations which are deductible gift recipients (DGRs).
When you make a gift, you do not receive a material benefit in return for your payment. This is contrasted with a contribution (for example, purchasing a ticket to attend a fundraising dinner) where you receive a benefit in return.
For you to claim a tax deduction for a gift, it must meet these conditions:
- The gift must be made to a deductible gift recipient (DGR).
- The gift must truly be a gift. A gift is a voluntary transfer of money or property where you receive nothing in return.
- The gift must be money or property, which includes financial assets such as shares.
How much to claim
For gifts of money, you can claim a deduction where the amount of the gift is $2 or more. For gifts of property, there are different rules, depending on the type of property and its value.
You can claim the deduction in the tax return for the income year in which the gift is made.
Your receipt – which you will need to substantiate the deduction – should tell you whether or not you can claim a deduction.
If you used the internet or phone to make a donation over $2, your web receipt or credit card statement can be used to substantiate the deduction. If you donated through third parties, such as banks and retail outlets, the receipt they gave you is also sufficient. If you contributed through 'workplace-giving' your payment summary shows the amount you donated.
Bushfire and flood donations
If you make donations of $2 or more to bucket collections conducted by approved organisations for victims of natural disasters, such as bushfires, severe storms or flooding, you can claim a tax deduction for these contributions without a receipt provided the total fo these contributions does not exceed $10.
What you can't claim
You can't claim as a gift or donation anything that provides you with a personal benefit, such as:
- raffle tickets
- items such as chocolates and pens
- the cost of attending fundraising dinners, even if the cost exceeds the value of the dinner (but see below)
- payments to school building funds made, for example, as an alternative to an increase in school fees
If you attend a fundraising event, you may still be able to claim a tax deduction even though the payment you have made is not regarded as a gift for tax purposes.
You can claim a portion of your contribution to the event as a tax deduction if the contribution is for an eligible fundraising event, organised for a DGR and conducted in Australia, including fetes, balls, gala shows, dinners, performances and similar events
If you make a contribution of money (such as buying a ticket), you can only claim a deduction if the amount spent is over $150. If you make a contribution of property, the property must be valued at more than $150 (if purchased within 12 months of making the contribution) or $5000 (if purchased more than 12 months before the contribution). In addition the market value of the benefit received must not be more than $150 or 20% of the contribution made (whichever is less).
Fundraising events held by political parties are ineligible for this concession. If the contribution is made to a political party, see below.
Political parties are not DGRs. However, in some circumstances, gifts and contributions made by individuals to political parties and independent candidates and members can be claimed as income tax deduction.
To claim a deduction, contributions must be more than $2. The most you can claim is
- $1,500 for contributions and gifts to political parties and
- $1,500 for contributions and gifts to independent candidates and members.
Businesses can't claim deductions for political contributions.
Book an online appointment today
Our H&R Block accountants are now working online. Book an appointment with an expert.