Private ruling: Income tax - assessable income
Date of advice: 24 September 2019
Published: November 2019
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 20XX

Ruling: Q1: Are the donations you receive assessable income? | A1: No

Relevant facts and circumstances: You are a non-profit company that receives donations that are given voluntarily by the public. You have provided details relevant to the arrangement.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-1 | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-10

Reasons for decision: Summary: All references made in these reasons for decision are to the Income Tax Assessment Act 1997 unless otherwise stated. The donations would be assessable income under subsection 6-1(1) if they were either ordinary income under section 6-5 or statutory income under section 6-10. Income from rendering personal services, from property and from carrying on trading activities is ordinary income. To determine whether a donation is assessable as ordinary income, it is necessary to establish whether it is a gift, and what the character of the gift is in the hands of the recipient. If the donation is not ordinary income, it is also necessary to consider whether it is included as statutory income by way of one of the provisions as listed in section 10-5. Guidance on what constitutes a gift is provided in Taxation Ruling TR 2005/13 Income tax: tax deductible gifts - what is a gift . Guidance on when a gift may constitute income is provided in Taxation Ruling IT 2674 Income tax: gifts to missionaries, ministers of religion and other church workers - are the gifts income? The donations you receive are not assessable income on the basis that: · they are not income from the carrying on of a business or trading activity or derived for a profit making purpose, · they are gifts as they are voluntary, arise by way of benefaction and the donor does not receive a material benefit or advantage in return, and · they are not related to any income producing activity of the recipient.