Tax Benefits

Tax Benefits Of Donating To Charity In Australia

The Australian Tax system is not as mean and punitive as it seems. With some knowledge of the tax system, one can take advantage of its provision to reduce the income that is subject to taxation.

With some knowledge of the tax systems, you can take advantage of its provisions to minimize the tax that you are subjected to.

One of the provisions by law is exemption enjoyed for making donations or offering gifts. However, these provisions
are not out rightly direct.

There are a set of conditions and provisions that come with the advantage. This article is about gaining a tax advantage by utilizing the provisions that come with gifts and donations.

The Tax Benefits Of Donating To Charity In Australia

Gifts and donations; what qualifies

The Australian law has various parameters used to identify a gift. The fundamental features of a gift are that the property of money must appear to be transferred voluntarily. The transfer should not be because of a contractual obligation or any other condition that there may be (ibid).

The other character of a gift is that it is transferred without the expectation of an advantage that is of material in nature (ibid). A gift is simply a voluntary and gratuitous transfer of an asset.

The same law defines a donation. An effectual donation must meet three aspects to be considered by law to be a donation.

The transfer of asset should be made on contemplation but not when the donor necessarily expects something in return.

Secondly, the donation must be made in the particular subject matter that is relevant to what is conceived by the donor.

Thirdly, the donation must be to the donee of the particular relevant matter.

The claims for tax deduction

Other than meeting the set definitions, the gift or donation must meet four main conditions as set by the Australian tax exemption options. The following are the main four conditions that qualifies the transfer for tax exemption.

  • The gift or donation must be directed to the listed DGR (Deductible gift recipients). The link lists the various DGRs that qualify for the tax advantage. So before you make your donations and pursue your claims peruse the list for a rightful recipient
  • The gift or donation must meet the definition of a gift or donation as provided above. There should be no material benefit transferred back to you.
  • The transferred gifts that enjoy these privileges must strictly be money or property. This means that share and other financial assets are included in the list.
  • The gift or donation must be in conformity to any other law that regulates the particular transfer. The income tax laws provisions sometimes affect some Deductible gift recipients. These provisions should be met before exemption.

What to claim

There are provisions that guide the amount to claim after a donation or a gift. If the gift is money, then one can make a tax claim provided the gift is more than $2.

If the gift is a property, then there are other issues involved other than the value of the property. These provisions depend on the type of property that is donated.

Most tax deductable donations are claimed in the tax return for the particular income that you will have made over that year. However, there are provisions that allow you to spread the deductions over a period of five income years.

There are certain donations that you may have been invited to but you do not understand how to take advantage of the tax provisions afforded for them.

If you made a bucket donation towards bushfire or floods, then you can claim your tax deduction for the sum equal or less than $10 but more than $2.

Tax Benefits

What you will not be able to claim

There are some gifts and donations that do not qualify for tax deductions. According to the Australian law, you do not qualify for the tax deduction when the donation or gift attract personal benefits of the following forms.

  • When you benefit in the form of raffle or art tickets
  • When you get benefits in the form of chocolates or pens
  • When you benefit from a reduced cost of attending a dinner for raising funds even in the event that the donation made exceeds the cost of the dinner
  • When you are awarded any membership fees or a reduction in school fees

These benefits may not be material but their beneficiaries are not considered for tax deductions.


You can take advantage of these legal options to pay less tax by making donations or gifts. The income tax that you are subjected to will be reduced incommensurate to the donation and gift that you have given.

However, there are a set of rules that guide the tax deductions that are provided for gifts and donations. Consider the rules when making your donations then claim for the tax advantage.