Private ruling: Donations to Deductible Gift Recipients.
Published: February 2014
Ruling period: 1 July 2013 - 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are donations to a Relief Fund made via a supermarkets tax deductible? | A1: No | Q2: Where a cash payment is made, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction? | A2: No | Q3: Where a cash payment is made by credit card, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction? | A3: No

Relevant facts and circumstances: · Donation made to a Relief Fund on behalf of a bushfire appeal via a supermarket. · Donation made using Credit Card. · The last four digits of the credit card are printed on the receipt. · The fund was activated to raise and coordinate donations to support the victims of the fires. · The fund is an endorsed deductible gift recipient (DGR) under Income Tax assessment Act 1997 (ITAA 1997) section 30.

Relevant legislative provisions: Income Tax assessment Act 1997 (ITAA 1997) section 30

Reasons for decision: Summary: Deductions for gifts are claimed by the person or organisation that makes the gift (the donor). Only certain organisations can receive tax deductible gifts. They are called deductible gift recipients (DGRs). A deductible gift recipient (DGR) is an organisation that is entitled to receive tax deductible gifts. DGRs are: listed by name in the tax law, or endorsed by the Tax Office. To be tax deductible, a gift to a DGR must satisfy the conditions contained at Item 1 of section 30-15 of the ITAA97. Specifically, the gift must be · made to an entity that has been endorsed as a DGR · a gift of money, property, trading stock or shares in a listed public company · and be more than $2 in value. | Detailed Reasoning - Conclusion: In the information you supplied you stated that you donated to a Relief Fund, however the receipt supplied to you indicates that you donated to a Bushfire Appeal. The Bushfire Appeal is not an endorsed DGR under section 30-15 of the ITAA97 You donated an amount of money via a supermarket to a Bushfire Appeal. This is not an endorsed DGR and therefore donations made are not tax deductible. | Detailed Reasoning - Question 2: Where a cash payment is made, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction? | Summary: If a taxpayer makes a gift/donation to a deductible gift recipient, he/she needs to retain the receipt issued by the deductible gift recipient for substantiation purposes. Subsection 30-228(1) of the ITAA 1997 states that if a DGR issues a receipt for a gift, the receipt must state the name and Australian Business Number (ABN) of the deductible gift recipient and the fact that the receipt is for a gift. The term 'gift' is not defined in the ITAA 1997. For the purposes of Division 30 of the ITAA 1997 the word 'gift' has its ordinary meaning. Rather than attempting a definition of gift, the courts have described a gift as having the following characteristics and features: · there is a transfer of money or property · the transfer is made voluntarily · the transfer arises by way of benefaction, and · no material benefit or advantage is received by the giver. | Detailed Reasoning - Conclusion: You donated cash to a Bushfire Appeal, you received a receipt, but it does not state the name and ABN of a deductible gift recipient nor the fact that the receipt is for a gift. Therefore it does not have the features necessary to meet the requirements for a deduction under Subsection 30-228(1) of the ITAA 1997. The receipt does not need to identify you as the donor; however it has not been issued by an endorsed DGR and therefore it is unable to be used as evidence to claim a tax deduction. | Detailed Reasoning - Question 3: Where a cash payment is made by credit card, is a receipt from a supermarket, which of its nature contains no information to identify the taxpayer, reasonable substantiation for the deduction? | Summary: If a taxpayer makes a gift/donation to a deductible gift recipient, he/she needs to retain the receipt issued by the deductible gift recipient for substantiation purposes. Subsection 30-228(1) of the ITAA 1997 states that if a DGR issues a receipt for a gift the receipt must state the name and ABN of the deductible gift recipient and the fact that the receipt is for a gift. The term 'gift' is not defined in the ITAA 1997. For the purposes of Division 30 of the ITAA 1997 the word 'gift' has its ordinary meaning. Rather than attempting a definition of gift, the courts have described a gift as having the following characteristics and features: · there is a transfer of money or property · the transfer is made voluntarily · the transfer arises by way of benefaction, and · no material benefit or advantage is received by the giver. | Detailed Reasoning - Conclusion: You donated money to a Bushfire Appeal using your credit card, and you received a receipt. As previously stated it does not state the name and ABN of a deductible gift recipient and the fact that the receipt is for a gift. Therefore it does not have the features necessary to meet the requirements to be able to claim a deduction under Subsection 30-228(1) of the ITAA 1997. The receipt does not need to identify you as the donor; however it has not been issued by an endorsed DGR and therefore it is unable to be used as evidence to claim a tax deduction.

Question 1: Are donation made to a Relief Fund on behalf of a bushfire appeal via a supermarket tax deductible?