Private ruling: Election to spread or apportion gift deduction
Date of advice: 11 July 2017
Published: November 2017
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Can you apply a deduction for a heritage/cultural gift made in 2012 against your taxable income for the 2015/2016 year? | A1: No | Q2: Can the Commissioner accept that an election to apportion your deduction for gifts made in the 2012 year was made after your 2012 income tax return has been lodged? | A2: No

Relevant facts and circumstances: You gifted heritage/cultural items to an eligible deductible gift recipient in early 2012. You received confirmation of the status of the gift as a heritage/cultural gift and endorsement of the valuation amount of $XXX, in mid-late 2012. You received itemised donation papers and general advice in relation to the possible treatment of your donation as a deduction for taxation purposes in late 2012. Your tax agent lodged your Income Tax Returns for the 2012 and 2013 years in late 2014. No deduction for gifts was claimed in your income tax returns lodged for the years 2012, 2013, 2014, and 2015.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 30-247, | Income Tax Assessment Act 1997 section 30-248 and | Income Tax Assessment Act 1997 section 30-249.

Reasons for decision: Summary: Division 30 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with deductions for gifts or contributions that you make. If a donor gives a heritage/cultural gift to a National Trust organisation and they accept the gift to preserve it for the benefit of the public, the donor may be able to claim a tax deduction for the value of the gift pursuant to Division 30 of the ITAA 1997. The tax deduction must be claimed in the income year in which the gift is made. However, the donor can make a written election to spread the tax deduction in certain circumstances. Pursuant to paragraph 30-248(1)(a) of the ITAA 1997, if you can deduct an amount under Division 30 of the ITAA 1997 for a gift covered by subsection 30-247(1) of the ITAA 1997, you may make a written election to spread that deduction over the current income year and up to four of the immediately following income years. In the election, you must specify the percentage (if any) of the deduction that you will deduct in each of the income years as per the requirements of subsection 30-248(2) of the ITAA 1997. As you did not make an election to spread the tax deduction for your gift before lodging your 2012 income tax return you cannot apply the deduction to your 2016 income tax return. Subsection 30-248(3) of the ITAA 1997 states that you must make the election to spread the tax deduction for your gift before you lodge your income tax return for the income year in which you made the gift pursuant to. Paragraph 30-249C(2) of the ITAA 1997 relates specifically to cultural property gifts and requires that you must give a copy of the election to the relevant secretary before you lodge your income tax return for the income year in which you made the gift. The legislation has no provision to allow discretion in accepting an election to apportion gift deductions form to be lodged after the income tax return for the year of donation has been lodged. As you made your donation in the 2012 financial year and your income tax return for the 2012 year has since been lodged, in late 2014, the Commissioner cannot now accept an election to apportion your deduction.