Draft Tax Ruling on 'Gifts'

The Australian Tax Office has released a draft ruling for public discussion on the meaning of the word ‘gift’ as a means of determining tax deductibility in the transfer of money or property.

Tax deductible gifts (to the value of $2 or more) made to a charity with Deductible Gift Recipient status or DGR can be in the form of money or property.

The ATO says 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 the beneficial interest in property;
– the transfer is made voluntarily;
– the transfer arises by way of benefaction; and
– no material benefit or advantage is received by the giver by way of return.

The ATO says that in doing so, the courts have recognised that the criteria may not be absolute and may involve a matter of degree.

It says in determining whether a transfer is a gift it is necessary to consider the whole set of circumstances surrounding the transfer and this may include consideration of parties other than the giver and the DGR.

It is therefore necessary to take account of those acts, transactions, arrangements and circumstances that provide the context and the explanation for the transfer.

The variety of circumstances are set out in the draft ruling. If you would like a copy of the ATO draft ruling send in Word Format us an email with the word ATO Draft Ruling Gift in the subject line to corpnews@probonoaustralia.com.au.

Comments on the ruling can be made via the following:

Due date: 4th February 2005
Contact officer: Marion Dexter
E-mail address: marion.dexter@ato.gov.au
Telephone: 03 9215 3747
Facsimile: 03 9215 3700
Address: PO Box 9990 Dandenong VIC 3175