Private ruling: Assessable income
Date of advice: 8 July 2024
Published: 19 August 2024
Ruling period: Year ending 30 June 2025 | Year ending 30 June 2026 | Year ending 30 June 2027
Date scheme commenced: 1 July 2024

Ruling: Q1: Are the support donations you receive from donors while undertaking a course of education assessable income? | A1: No. Based on the information provided to the Commissioner the support donations you may receive while undertaking the course of education won't be assessable income under Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) as they will not be received in relation to the carrying on of work within the organisation. The relevant Taxation Ruling provides 'Whether a gift is assessable income depends on the quality or the character of the gift in the hands of the recipient'. Sub-paragraphs (a) 'how, in what capacity, and for what reason the recipient received the gift'; and (g) 'whether the recipient relies on the gift for regular maintenance of himself or herself and any dependants. The Taxation Ruling provides that occasional gifts received for the individual's upkeep and support are not assessable income because they have no connection with any employment. The donations/gifts received by you while studying will not be assessable. | Q2: Will the support donations received by you from donors be assessable when you resume part-time work? | A2: Yes. The support donations you receive while undertaking part-time work within the organisation will be assessable income under Section 6-5 of the ITAA 1997 as they will be received as part of that work. The Taxation Ruling provides 'Whether a gift is assessable income depends on the quality or the character of the gift in the hands of the recipient'.

Relevant facts and circumstances: You have been employed for a number of years. Your employment will cease in the near future. You will begin a course of study. This will be undertaken on a full-time basis without any paid employment. It is common with these roles, donations or 'support' raising is undertaken by employees of organisations to fund their employment costs. Individuals in the community with aligned beliefs/interests voluntarily transfer funds to the organisation which the organisation uses for employment and administration costs. Once you leave your current organisation, some current supporters, under no obligation or in response to any connection with your current employer, may wish to continue to transfer you funds to support the costs of your study/family upkeep. You have contacted your supporters and advised them of your resignation and advised that they may wish to cease making payments to the organisation, choose another worker to support in the organisation, or alternatively can consider redirecting their funds to you personally to assist with family finances while you are studying. You do not expect that these gifts will exceed the tax-free threshold.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5