Gifts tax deduction | 2023 Gotax
Giving gifts is a really good way to say thankyou to the universe that can benefit your clients, colleagues, friends, and family. And some of those gifts can also be tax deductible?
You can claim a tax deduction for gifts or donations to organisations that have the status of a deductible gift recipient (DGR). A DGR is an organisation or fund that is registered to receive tax deductible gifts or donations. You can check the DGR status of an organisation at ABN Look-up, https://abr.business.gov.au/Tools/DgrListing : Deductible gift recipients.
But note that not all gifts are eligible for a tax deduction.
There are four conditions that your gift or donation must meet:
- It must be made to a DGR.
- It must truly be a gift or donation – that is, you are voluntarily transferring money or property without receiving, or expecting to receive, any material benefit or advantage in return.
- It must be money or property – this can include financial assets such as shares.
- It must comply with any relevant gift conditions – for some DGRs, the income tax law adds conditions affecting the types of deductible gifts they can receive.
Some examples of gifts that are tax deductible are:
- Gifts of money – you can claim the amount of the gift, but it must be $2 or more.
- Gifts of property or shares – there are different rules depending on the type and value of the property.
- Gifts under the Heritage and Cultural programs – there are special circumstances where donations can also be deductible.
- Gifts to political parties and independents – in some circumstances claiming political contributions and gifts as a deduction is allowable.
These gifts are not tax deductible are:
- Gifts that provide you with a personal benefit or something in return, such as raffle tickets, chocolates, mugs, or entry to a fund-raising event.
- Gifts made to social media or crowdfunding platforms unless they are a registered DGR.
- Gifts that are not money or property, such as services or time.
Some occupations where giving tax deductible gifts is typical are:
- Accountants
- Lawyers
- Financial advisers
- Real estate agents
- Consultants
- Salespeople
To claim a deduction for your gifts or donations, you must have a record of your donation such as a receipt. You should also keep records of all tax-deductible gifts and contributions you make. Receipts should clearly indicate that the organisation is a registered charity
For more information on whether your gifts are tax deductible visit gotax.com.au where one of their tax experts can assist you.
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