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INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 78  DEDUCTION FOR GIFTS, PENSIONS ETC.  

78(1)  Objects.  


The object of this section is to provide for the deductibility of certain gifts, contributions, pensions, gratuities and retiring allowances.

78(2)  Outline.  


The following table sets out an outline of this section:
Type of deductionEntitlement to deductionValuation rulesAncillary provisions
Gifts to certain funds, authorities or institutions(4), (5)(12)-
Gifts to The Australiana Fund, libraries, museums, or art galleries(6), (6A)(13), (14), (15), (15A)(16), (16A)
Gifts to Artbank(7)(13), (14), (15)(16)
Gifts of heritage properties to National Trust(8)(13), (14), (15)(16)
Contributions to registered political parties(9), (10)(17)-
Pensions, gratuities or retiring allowances for ex-employees etc.(11)--

78(3)  Index.  


The following is an index to this section:
AAP Mawson's Huts Foundation Limited(4)-Table 6, item 6.2.23
Academies - professional(4)-Table 2
Academy of the Social Sciences in Australia Incorporated(4)-Table 2, item 2.2.1
Amnesty International Australia(4)-Table 4, item 4.2.1
Ancillary funds(5)
Antarctic research(4)-Table 3, item 3.2.3
Apportionment of deductions under subsection (6), (7) or (8)(16)
Approved research institutes - section 73A(4)-Table 3, item 3.1.1
Ararat War Memorial Restoration Trust Fund(4)-Table 5, item 5.2.4
Armed forces, auxiliaries(4)-Table 5, item 5.1.2
Artbank(7)
Art galleries(4)-Table 12, items 12.1.4 and 12.1.5; (6)
Australia Foundation for Culture and the Humanities Ltd.(4)-Table 12, item 12.2.2
Australian Academy of Science(4)-Table 2, item 2.2.2
Australian Academy of Technological Sciences and Engineering Limited(4)-Table 2, item 2.2.4
Australian Academy of the Humanities for the Advancement of Scholarship in Language, Literature, History, Philosophy and the Fine Arts(4)-Table 2, item 2.2.3
Australiana Fund(4)-Table 12, item 12.2.1; (6)
Australian and New Zealand Association for the Advancement of Science(4)-Table 2, item 2.2.6
Australian and New Zealand College of Anaesthetists(4)-Table 1, item 1.2.13
Australian College of Obstetricians and Gynaecologists(4)-Table 1, item 1.2.1
Australian College of Occupational Medicine(4)-Table 1, item 1.2.2
Australian Conservation Foundation Incorporated(4)-Table 6, item 6.2.1
Australian Games Uniform Company Limited(4)-Table 10, item 10.2.6
Australian Institute of International Affairs(4)-Table 9, item 9.2.1
Australian Ireland Fund(4)-Table 2, item 2.2.7
Australian National Korean War Memorial Trust Fund(4)-Table 5, item 5.2.10
Australian National Travel Association(4)-Table 9, item 9.2.2
Australian Postgraduate Federation in Medicine(4)-Table 1, item 1.2.3
Australian Regional Council of the Royal College of Obstetricians and Gynaecologists(4)-Table 1, item 1.2.11
Australian Sports Foundation(4)-Table 10, item 10.2.1
Borneo Memorials Trust Fund(4)-Table 5, item 5.2.9
Brisbane RAAF Memorial Fund(4)-Table 5, item 5.2.5
Central Synagogue Restoration Fund(4)-Table 5, item 5.2.8
Centre for Independent Studies(4)-Table 3, item 3.2.1
Child Accident Prevention Foundation of Australia(4)-Table 4, item 4.2.2
Cobram and District War Memorial Incorporated Fund(4)-Table 5, item 5.2.7
College buildings(4)-Table 2, item 2.1.10
College of Radiologists in Australasia(4)-Table 1, item 1.2.4
Conditional gifts - subsection (6), (7) or (8)(15)
Connellan Airways Trust(4)-Table 11, item 11.2.1
Conservation bodies(4)-Table 6
Constitutional Centenary Foundation Incorporated(4)-Table 2, item 2.2.15
Council for Christian Education in Schools(4)-Table 2, item 2.2.10
Council for Jewish Education in Schools(4)-Table 2, item 2.2.11
Cultural organisations(4)-Table 12
Defence organisations(4)-Table 5
Definitions(26)
Diseases - institutions researching causes, prevention or cure(4)-Table 1, items 1.1.4 and 1.1.5
Diseases - charitable institutions whose principal activity is to promote the prevention or the control of diseases in human beings(4)-Table 1, item 1.1.6
Education bodies(4)-Table 2
Employees - pensions etc.(11)
Environmental organisations(4)-Table 6
Family organisations(4)-Table 8
Foundation for Development Cooperation Ltd(4)-Table 9, item 9.2.3
Friends of the Duke of Edinburgh's Award in Australia Incorporated(4)-Table 11, item 11.2.2
Gratuities for ex-employees(11)
Greening Australia Limited(4)-Table 6, item 6.2.2
Guides Australia Incorporated(4)-Table 10, items 10.2.2 and 10.2.3
Health organisations(4)-Table 1
Herbert Vere Evatt Memorial Foundation Incorporated(4)-Table 11, item 11.2.3
Heritage properties(8)
Hospitals(4)-Table 1, items 1.1.1 and 1.1.2
H.R.H. The Duke of Edinburgh's Commonwealth Study Conferences (Australia) Incorporated(4)-Table 2, item 2.2.12
Ian Clunies Ross Memorial Foundation(4)-Table 3, item 3.2.2
Industrial Design Council of Australia(4)-Table 7, item 7.2.1
Industry, trade and design(4)-Table 7
International affairs(4)-Table 9
Joint ownership of property - subsection (6), (7) or (8)(16)
Landcare Australia Limited(4)-Table 6, item 6.2.3
Libraries(4)-Table 12, items 12.1.2 and 12.1.5; (6)
Life Education Centre(4)-Table 2, item 2.2.8
Lionel Murphy Foundation(4)-Table 2, item 2.2.13
Marcus Oldham Farm Management College(4)-Table 2, item 2.2.14
Marriage guidance organisations(4)-Table 8, item 8.1.1
Medical colleges(4)-Table 1
Medical research(4)-Table 1
Monash Mt Eliza Graduate School of Business and Government Limited(4)-Table 2, item 2.2.5
Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust(4)-Table 5, item 5.2.6
Museums(4)-Table 12, items 12.1.3 and 12.1.5; (6)
National Foundation for Australian Women Limited(4)-Table 4, item 4.2.3
National Parks associations(4)-Table 6
National Safety Council of Australia Limited(4)-Table 4, item 4.2.4
National Trust bodies(4)-Table 6; (8)
Nature organisations(4)-Table 6
Necessitous circumstances - funds for relief of persons in(4)-Table 4, item 4.1.3
New South Wales College of Nursing(4)-Table 1, item 1.2.5
Nursing Mothers' Association of Australia(4)-Table 8, item 8.2.1
Overseas aid funds(4)-Table 9, item 9.1.1
Pearl Watson Foundation Limited(4)-Table 4, item 4.2.5
Pensions for ex-employees(11)
Philanthropic trusts(4)-Table 11
Playford Memorial Trust(4)-Table 11, item 11.2.4
Political contributions(9), (10)
Political parties(9), (10)
Polly Farmer Foundation (Inc)(4)-Table 2, item 2.2.16
Prevention of cruelty to animals(4)-Table 4
Productivity(4)-Table 7
Productivity Promotion Council of Australia(4)-Table 7, item 7.2.2
Property - gifts of(4)-(10)
 - valuations of(12)-(17)
Public benevolent institutions(4)-Table 4, item 4.1.1
Queen Elizabeth II Silver Jubilee Trust for Young Australians(4)-Table 11, item 11.2.6
Queen Elizabeth the Second Coronation Gift Fund(4)-Table 11, item 11.2.8
Religious instruction/education(4)-Table 2
Research institutions(4)-Table 3
Residential education institutions(4)-Table 2
Retiring allowances for ex-employees(11)
Royal Australian and New Zealand College of Psychiatrists(4)-Table 1, item 1.2.6
Royal Australian College of General Practitioners(4)-Table 1, item 1.2.7
Royal Australasian College of Physicians(4)-Table 1, item 1.2.8
Royal Australasian College of Surgeons(4)-Table 1, item 1.2.9
Royal College of Nursing, Australia(4)-Table 1, item 1.2.12
Royal College of Pathologists of Australasia(4)-Table 1, item 1.2.10
Rural school hostels(4)-Table 2, item 2.1.11
Sandakan Memorials Trust Fund(4)-Table 5, item 5.2.2
School buildings(4)-Table 2, item 2.1.10
Schools(4)-Table 2
Scouts(4)-Table 10, items 10.2.4 and 10.2.5
Shrine of Remembrance Restoration and Development Trust(4)-Table 5, item 5.2.1
Sir Robert Menzies Memorial Trust Foundation Limited(4)-Table 11, 11.2.5
Sports and recreation(4)-Table 10
Tax incentives for the artsSee ``Property''
Tertiary education/TAFE(4)-Table 2
Trusts - philanthropic(4)-Table 11
 - ancillary(5)
Universities - general(4)-Table 2
 - research(4)-Table 3
Valuations(12)-(17)
Valuers(18)
Victoria Conservation Trust(4)-Table 6, item 6.2.6
``Weary'' Dunlop Statue Appeal(4)-Table 5, item 5.2.3
Welfare and rights(4)-Table 4
Wills(5)
Winston Churchill Memorial Trust(4)-Table 11, item 11.2.7
Work Skill Australia Foundation Incorporated(4)-Table 7, item 7.2.3
Works of artSee ``Property''
World Wide Fund for Nature Australia(4)-Table 6, item 6.2.22

78(4)  Deductions for gifts - listed funds, authorities and institutions.  


A gift by a taxpayer in the 1996-97 income year or an earlier income year to a fund, authority or institution mentioned in any of the following tables is an allowable deduction for the year of income in which the gift was made if:


(a) the fund, authority or institution is in Australia; and


(b) the gift is:


(i) money; or

(ii) property that was purchased by the taxpayer during the 12 months before the gift was made; or

(iii) property that is trading stock of the taxpayer to which subsection 36(1) applies, where the taxpayer has not made, and does not make, an election under subsection 36(3) or section 36AAA in relation to the property; and


(c) the value of the gift is $2 or more; and


(d) the gift is not a testamentary gift; and


(e) if one or more special conditions are set out in the table opposite the name of the fund, authority or institution - those conditions are satisfied; and


(f) if the gift is property - a deduction is not allowable to the taxpayer under subsection (6), (6A), (7) or (8) in respect of the gift.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of gifts made in the 1997-98 year of income or a later year of income.

Each item is independent of every other item.
GUIDE TO TABLES
1.           Health
2.           Education
3.           Research
4.           Welfare and Rights
5.           Defence
6.           The Environment
7.           Industry, Trade and Design
8.           The Family
9.           International Affairs
10.         Sports and Recreation
11.         Philanthropic Trusts
12.         Cultural Organisations


TABLE 1 - HEALTH


 ItemFund, authority or institutionSpecial conditions
1. General1.1.1a public hospital 
 1.1.2a hospital carried on by a society or association otherwise than for the purposes of profit or gain to the individual members of the society or association 
 1.1.3a public fund established before 23 October 1963 and maintained for the purpose of providing money for hospitals covered by items 1.1.1 or 1.1.2 or for the establishment of such hospitals 
 1.1.4a public authority engaged in research into the causes, prevention or cure of disease in human beings, animals or plantsthe gift must be for such research
 1.1.5a public institution engaged solely in research into the causes, prevention or cure of disease in human beings, animals or plants 
 1.1.6a charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings 
2. Specific1.2.1The Australian College of Obstetricians and Gynaecologists 
 1.2.2the Australian College of Occupational Medicine 
 1.2.3the Australian Postgraduate Federation in Medicinethe gift must be made for education or research in medical knowledge or science
 1.2.4the College of Radiologists in Australasiathe gift must be made for education or research in medical knowledge or science
 1.2.5the New South Wales College of Nursing 
 1.2.6the Royal Australian and New Zealand College of Psychiatrists 
 1.2.7the Royal Australian College of General Practitionersthe gift must be made for education or research in medical knowledge or science
 1.2.8the Royal Australasian College of Physicians 
 1.2.9the Royal Australasian College of Surgeons 
 1.2.10the Royal College of Pathologists of Australasiathe gift must be made for education or research in medical knowledge or science
 1.2.11the Australian Regional Council of the Royal College of Obstetricians and Gynaecologists 
 1.2.12the Royal College of Nursing, Australia 
 1.2.13the Australian and New Zealand College of Anaesthetiststhe gift must be made after 26 October 1994


TABLE 2 - EDUCATION


 ItemFund, authority or institutionSpecial conditions
1. General2.1.1a public university  
 2.1.2a public fund for the establishment of a public university  
 2.1.3a higher education institution within the meaning of the Employment, Education and Training Act 1988  
 2.1.4a residential educational institution affiliated under statutory provisions with a public university  
 2.1.5a residential educational institution established by the Commonwealth  
 2.1.6a residential educational institution that is affiliated with a higher education institution within the meaning of the Employment, Education and Training Act 1988  
 2.1.7an institution that is certified by the Minister for Employment, Education and Training, by signed instrument, to be a technical and further education institution within the meaning of the Employment, Education and Training Act 1988the gift must be for certified purposes of the institution or for the provision of certified facilities for the institution (see subsection (26))
 2.1.8a public fund established and maintained exclusively for the purpose of providing religious instruction in government schools in Australia  
 2.1.9a public fund established and maintained by a Roman Catholic archdiocesan or diocesan authority exclusively for the purpose of providing religious instruction in government schools in Australia  
 2.1.10a public fund established and maintained exclusively for providing money for the acquisition, construction or maintenance of a building used, or to be used, as a school or college by:  
  (a)a government; or  
  (b)a public authority; or  
  (c)a society or association which is carried on otherwise than for the purposes of profit or gain to the individual members of the society or association  
 2.1.11a public fund established and maintained exclusively for providing money for the acquisition, construction or maintenance of an eligible rural school hostel building (see subsection (26))  
2. Specific2.2.1The Academy of the Social Sciences in Australia Incorporated  
 2.2.2the Australian Academy of Science  
 2.2.3the Australian Academy of the Humanities for the Advancement of Scholarship in Language, Literature, History, Philosophy and the Fine Arts  
 2.2.4the Australian Academy of Technological Sciences and Engineering Limited  
 2.2.5the Monash Mt Eliza Graduate School of Business and Government Limited  
 2.2.6the Australian and New Zealand Association for the Advancement of Science  
 2.2.7the Australian Ireland Fund  
 2.2.8the Life Education Centre  
 2.2.9a company that conducts life education programs under the auspices of the Life Education Centre(a)the gift must be for the conduct of such programs; and
    (b)the company must not be carried on for the purposes of profit or gain to its individual members; and
    (c)the company must, by the terms of the company's constituent document, be prohibited from making any distribution, whether in money, property or otherwise, to its members
 2.2.10the Council for Christian Education in Schools  
 2.2.11the Council for Jewish Education in Schools  
 2.2.12H.R.H. The Duke of Edinburgh's Commonwealth Study Conferences (Australia) Incorporated  
 2.2.13the Lionel Murphy Foundation  
 2.2.14the Marcus Oldham Farm Management Collegethe gift must be for certified purposes of the college or for the provision of certified facilities for the college (see subsection (26))
 2.2.15the Constitutional Centenary Foundation Incorporatedthe gift must be made after 27 June 1994
 2.2.16the Polly Farmer Foundation (Inc)the gift must be made after 6 September 1995


TABLE 3 - RESEARCH


 ItemFund, authority or institutionSpecial conditions
1. General3.1.1a university, college, institute, association or organisation which is an approved research institute for the purposes of section 73Athe gift must be for purposes of scientific research as defined in section 73A
2. Specific3.2.1the Centre for Independent Studies 
 3.2.2the Ian Clunies Ross Memorial Foundation 
 3.2.3the Commonwealththe gift must be made for purposes of research in the Australian Antarctic Territory


TABLE 4 - WELFARE AND RIGHTS


 ItemFund, authority or institutionSpecial conditions
1. General4.1.1a public benevolent institution 
 4.1.2a public fund established before 23 October 1963 and maintained for the purpose of providing money for public benevolent institutions or for the establishment of public benevolent institutions 
 4.1.3a public fund established and maintained for the relief of persons in Australia who are in necessitous circumstances 
2. Specific4.2.1Amnesty International Australia 
 4.2.2the Child Accident Prevention Foundation of Australia 
 4.2.3the National Foundation for Australian Women Limited 
 4.2.4the National Safety Council of Australia Limited 
 4.2.5the Pearl Watson Foundation Limited 
 4.2.6the Royal Society for the Prevention of Cruelty to Animals New South Wales 
 4.2.7the Royal Society for the Prevention of Cruelty to Animals (Victoria) Inc. 
 4.2.8the Royal Queensland Society for the Prevention of Cruelty 
 4.2.9the Royal Society for the Prevention of Cruelty to Animals (South Australia) Incorporated 
 4.2.10the Royal Society for the Prevention of Cruelty to Animals Western Australia (Incorporated) 
 4.2.11the R.S.P.C.A. (Tasmania) Incorporated 
 4.2.12the Society for the Prevention of Cruelty to Animals (Northern Territory) 
 4.2.13the Royal Society for the Prevention of Cruelty to Animals (A.C.T.) Incorporated 
 4.2.14the R.S.P.C.A. Australia Incorporated 


TABLE 5 - DEFENCE


 ItemFund, authority or institutionSpecial conditions
1. General5.1.1the Commonwealth or a Statethe gift must be made for purposes of defence
 5.1.2a public institution or public fund established and maintained for the comfort, recreation or welfare of members of the armed forces of any part of Her Majesty's dominions, or of any allied or other foreign force serving in association with Her Majesty's armed forces 
2. Specific5.2.1the Shrine of Remembrance Restoration and Development Trustthe gift must be made after 24 November 1992 and before 1 July 1999
 5.2.2The Sandakan Memorials Trust Fundthe gift must be made after 29 July 1993 and before 30 July 1997
 5.2.3The ``Weary'' Dunlop Statue Appealthe gift must be made after 15 July 1993 and before 16 July 1994
 5.2.4the Ararat War Memorial Restoration Trust Fundthe gift must be made after 3 April 1994 and before 4 April 1996
 5.2.5The Brisbane RAAF Memorial Fundthe gift must be made after 16 June 1994 and before 17 June 1996
 5.2.6the Mount Macedon Memorial Cross Restoration, Development and Maintenance Trustthe gift must be made after 23 April 1994 and before 25 April 1996
 5.2.7the Cobram and District War Memorial Incorporated Fundthe gift must be made after 18 October 1995 and before 19 October 1997
 5.2.8The Central Synagogue Restoration Fundthe gift must be made after 22 December 1995 and before 23 December 1997
 5.2.9The Borneo Memorials Trust Fundthe gift must be made after 22 December 1995 and before 23 December 1997
 5.2.10Australian National Korean War Memorial Trust Fundthe gift must be made after 1 September 1996 and before 2 September 1998


TABLE 6 - THE ENVIRONMENT


 ItemFund, authority or institutionSpecial conditions
1. General6.1.1a fund that, when the gift is made, is on the Register of Environmental Organisations kept under section 78AB 
2. Specific6.2.1the Australian Conservation Foundation Incorporatedspecial conditions set out in subsection (25)
 6.2.2Greening Australia Limitedspecial conditions set out in subsection (25)
 6.2.3Landcare Australia Limitedspecial conditions set out in subsection (25)
 6.2.4the National Parks Association of New South Walesspecial conditions set out in subsection (25)
 6.2.5the Victorian National Parks Association Incorporatedspecial conditions set out in subsection (25)
 6.2.6the Victoria Conservation Trustspecial conditions set out in subsection (25)
 6.2.7the National Parks Association of Queenslandspecial conditions set out in subsection (25)
 6.2.8The Nature Conservation Society of South Australia Incorporatedspecial conditions set out in subsection (25)
 6.2.9the National Parks Foundation of South Australia Incorporatedspecial conditions set out in subsection (25)
 6.2.10the Western Australian National Parks and Reserves Association Incorporatedspecial conditions set out in subsection (25)
 6.2.11the Tasmanian Conservation Trust Incorporatedspecial conditions set out in subsection (25)
 6.2.12the National Parks Association of the Australian Capital Territory Incorporatedspecial conditions set out in subsection (25)
 6.2.13the National Trust of Australia (New South Wales) 
 6.2.14the National Trust of Australia (Victoria) 
 6.2.15The National Trust of Queensland 
 6.2.16The National Trust of South Australia 
 6.2.17The National Trust of Australia (W.A.) 
 6.2.18the National Trust of Australia (Tasmania) 
 6.2.19The National Trust of Australia (Northern Territory) 
 6.2.20the National Trust of Australia (A.C.T.) 
 6.2.21the Australian Council of National Trusts 
 6.2.22the World Wide Fund for Nature Australiaspecial conditions set out in subsection (25)
 6.2.23AAP Mawson's Huts Foundation Limitedthe gift must be made after 17 March 1997


TABLE 7 - INDUSTRY, TRADE AND DESIGN


 ItemFund, authority or institutionSpecial conditions
1. General7.1.1--
2. Specific7.2.1the Industrial Design Council of Australia 
 7.2.2the Productivity Promotion Council of Australia 
 7.2.3the Work Skill Australia Foundation Incorporated 


TABLE 8 - THE FAMILY


 ItemFund, authority or institutionSpecial conditions
1. General8.1.1a public fund established and maintained exclusively for the purpose of providing money to be used in giving marriage guidance to persons in Australia through a voluntary organisation or through a branch or section of such an organisationthe organisation, branch or section, as the case may be, must be approved by the Attorney-General (see subsection (24))
2. Specific8.2.1the Nursing Mothers' Association of Australia 


TABLE 9 - INTERNATIONAL AFFAIRS


 ItemFund, authority or institutionSpecial conditions
1. General9.1.1a public fund in respect of which there is in force, at the time when the gift is made, a declaration under subsection (21) that the fund is an eligible fund for the purposes of this item 
2. Specific9.2.1the Australian Institute of International Affairs 
 9.2.2the Australian National Travel Association 
 9.2.3The Foundation for Development Cooperation Ltd 


TABLE 10 - SPORTS AND RECREATION


 ItemFund, authority or institutionSpecial conditions
1. General10.1.1--
2. Specific10.2.1the Australian Sports Foundation 
 10.2.2Guides Australia Incorporated 
 10.2.3an institution that is known as a State or Territory branch of Guides Australia Incorporated 
 10.2.4the Scout Association of Australia 
 10.2.5an institution that is known as a State or Territory branch of the Scout Association of Australia 
 10.2.6the Australian Games Uniform Company Limitedthe gift must be made after 6 September 1995


TABLE 11 - PHILANTHROPIC TRUSTS


 ItemFund, authority or institutionSpecial conditions
1. General11.1.1--
2. Specific11.2.1the Connellan Airways Trust 
 11.2.2The Friends of the Duke of Edinburgh's Award in Australia Incorporated 
 11.2.3the Herbert Vere Evatt Memorial Foundation Incorporated 
 11.2.4the Playford Memorial Trust 
 11.2.5The Sir Robert Menzies Memorial Foundation Limited 
 11.2.6the Queen Elizabeth II Silver Jubilee Trust for Young Australians 
 11.2.7the Winston Churchill Memorial Trust 
 11.2.8the Queen Elizabeth the Second Coronation Gift Fund 


TABLE 12 - CULTURAL ORGANISATIONS


 ItemFund, authority or institutionSpecial conditions
1. General12.1.1a fund that, when the gift is made, is on the Register of Cultural Organisations kept under section 78AA 
 12.1.2a public library 
 12.1.3a public museum 
 12.1.4a public art gallery 
 12.1.5an institution consisting of a public library, public museum and public art gallery or of any 2 of them 
2. Specific12.2.1The Australiana Fund 
 12.2.2Australia Foundation for Culture and the Humanities Ltd.the gift must be made after 8 November 1996

78(5)  Deductions for gifts - ancillary funds.  


A gift by a taxpayer in the 1996-97 income year or an earlier income year to a fund is an allowable deduction for the year of income in which the gift was made if:


(a) the fund is a public fund established and maintained under a will or instrument of trust exclusively for:


(i) the purpose of providing money, property or benefits to or for funds, authorities or institutions referred to, and for the purposes (if any) referred to, in any of the items in the tables in subsection (4); or

(ii) the establishment of such funds, authorities or institutions; and


(b) the Commissioner is satisfied that the terms of the will or instrument of trust are such that any money (including income derived from investments and proceeds of the realisation of investments):


(i) paid or accrued to the fund as a direct or indirect result of the gift; and

(ii) not applied for the purposes of the fund;
may not be invested by the trustee otherwise than in a manner in which trustees are permitted by an Act, a State Act or a law of a Territory to invest trust money without special authorisation; and


(c) the gift is:


(i) money; or

(ii) property that was purchased by the taxpayer during the 12 months before the gift was made; or

(iii) property that is trading stock of the taxpayer to which subsection 36(1) applies, where the taxpayer has not made, and does not make, an election under subsection 36(3) or section 36AAA in relation to the property; and


(d) the value of the gift is $2 or more; and


(e) the gift is not a testamentary gift; and


(f) if the gift is property - a deduction is not allowable to the taxpayer under subsection (6), (6A), (7) or (8) in respect of the gift.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of gifts made in the 1997-98 year of income or a later year of income.

78(6)  Deductions for gifts of property - Australiana Fund, libraries, museums and art galleries.  


A gift by a taxpayer in the 1996-97 income year or an earlier income year to:


(a) The Australiana Fund; or


(b) a public library in Australia; or


(c) a public museum in Australia; or


(d) a public art gallery in Australia; or


(e) an institution in Australia consisting of a public library, a public museum and a public art gallery or any 2 of them;

is an allowable deduction for the year of income in which the gift was made if:


(f) the gift is property (other than an estate or interest in land or in a building or part of a building); and


(g) the value of the gift is $2 or more; and


(h) the property is given to, and accepted by, The Australiana Fund or the authority or institution concerned for inclusion in the collection, or any of the collections, maintained or being established by that Fund, authority or institution; and


(i) the gift is not a testamentary gift; and


(j) the special valuation conditions set out in subsection (13) are complied with.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of gifts made in the 1997-98 year of income or a later year of income.

78(6A)  Deductions for testamentary gifts of property - Cultural Bequests Program.  


Subject to subsection (6F), a testamentary gift made by a taxpayer in the 1996-97 income year or an earlier income year under the scheme formulated by the Australian Government and known as the Cultural Bequests Program to:


(a) The Australiana Fund; or


(b) a public library in Australia; or


(c) a public museum in Australia; or


(d) a public art gallery in Australia; or


(e) an institution in Australia consisting of a public library, a public museum and a public art gallery or any 2 of them;

is an allowable deduction if:


(f) the gift is property (other than an estate or interest in land or in a building or part of a building); and


(g) the property is given to, and accepted by, The Australiana Fund or the authority or institution concerned for inclusion in the collection, or any of the collections, maintained or being established by that Fund, authority or institution; and


(h) the Minister for Communications and the Arts has given the taxpayer a certificate under subsection (6B) approving the gift and specifying the value of the gift for the purposes of this subsection; and


(i) the value of the gift, as specified in the certificate, is $2 or more.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of testamentary gifts made in the 1997-98 year of income or a later year of income.

78(6B)  Gifts covered by subsection (6A) - issue of certificates.  


Subject to subsections (6C) and (6E), the Minister for Communications and the Arts may, on written application by a taxpayer, give the taxpayer a certificate:


(a) approving a gift for the purposes of subsection (6A); and


(b) specifying the value of the gift for the purposes of that subsection; and


(c) containing such other information as the Commissioner, in writing, requires.

78(6C)  Gifts covered by subsection (6A) - approval to be in accordance with Ministerial guidelines.  


A decision of the Minister for Communications and the Arts:


(a) to approve a gift for the purposes of subsection (6A); or


(b) to specify a particular value for a gift for the purposes of that subsection;

must be made in accordance with written guidelines made by that Minister under this subsection.

78(6D)  Gifts covered by subsection (6A) - content of guidelines.  


The guidelines made under subsection (6C) may require the Minister for Communications and the Arts, in approving gifts and specifying values, to take into account:


(a) specified criteria; or


(b) recommendations of particular bodies; or


(c) any other factors.

78(6E)  Gifts covered by subsection (6A) - restrictions on issue of certificates.  


The Minister for Communications and the Arts:


(a) must determine, in writing, an amount as the maximum approval amount for certificates given under subsection (6B) for each financial year; and


(b) must not give any certificates under that subsection in a financial year before specifying the maximum approval amount for that financial year; and


(c) must not give a certificate under that subsection if the value specified in the certificate, when added to the values specified in all certificates previously given under that subsection in that financial year, would exceed the maximum approval amount for certificates given in that financial year.

[ CCH Note: The maximum approval amount for each of the 1995/96 and 1996/97 financial years is $5m ( Gazette No GN 7 of 21 February 1996).]

78(6F)  Gifts covered by subsection (6A) - assessment in which deduction allowable.  


Subject to subsection (6G), a deduction to which subsection (6A) applies is allowable in the assessment of the taxpayer in respect of income of the year of income in which the taxpayer died and not otherwise.

78(6G)  Gifts covered by subsection (6A) - when deduction allowable in assessment of taxpayer's estate.  


If:


(a) an amount (the ``section 79C amount'' ) of the deduction to which subsection (6A) applies is not allowable because of section 79C in the assessment of the taxpayer in respect of income of the year of income in which the taxpayer died; and


(b) the taxpayer died before the last day of a year of income;

the section 79C amount is allowable in the assessment of the taxpayer's estate in respect of income of the remainder of that year of income.

78(7)  Deductions for gifts of property - Artbank.  


A gift by a taxpayer in the 1996-97 income year or an earlier income year to the Commonwealth is an allowable deduction for the year of income in which the gift was made if:


(a) the gift is property (other than an estate or interest in land or in a building or part of a building); and


(b) the property is given to, and accepted by the Commonwealth for inclusion in the collection, or any of the collections, maintained or being established for the purposes of Artbank; and


(c) the gift is not a testamentary gift; and


(d) the special valuation conditions set out in subsection (13) are complied with.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of gifts made in the 1997-98 year of income or a later year of income.

78(8)  Deductions for gifts of heritage properties - National Trust.  


A gift by a taxpayer in the 1996-97 income year or an earlier income year to:


(a) the National Trust of Australia (New South Wales); or


(b) the National Trust of Australia (Victoria); or


(c) The National Trust of Queensland; or


(d) The National Trust of South Australia; or


(e) The National Trust of Australia (W.A.); or


(f) the National Trust of Australia (Tasmania); or


(g) The National Trust of Australia (Northern Territory); or


(h) the National Trust of Australia (A.C.T.); or


(i) the Australian Council of National Trusts;

is an allowable deduction for the year of income in which the gift was made if:


(j) the gift is property; and


(k) the value of the gift is $2 or more; and


(l) the property consists of a place within the meaning of the Australian Heritage Commission Act 1975 as in force when the gift was made; and


(m) at the time when the gift was made, the place was listed in the Register of the National Estate kept under the Australian Heritage Commission Act 1975 as in force when the gift was made; and


(n) the property was accepted by the National Trust body concerned for the purpose of preserving the property for the benefit of the public; and


(o) the gift is not a testamentary gift; and


(p) the special valuation conditions set out in subsection (13) are complied with.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of gifts made in the 1997-98 year of income or a later year of income.

78(9)  Deductions for contributions to political parties.  


A contribution by a taxpayer in the 1996-97 income year or an earlier income year to a registered political party (within the meaning of the Commonwealth Electoral Act 1918 ) is an allowable deduction for the year of income in which the contribution was made if:


(a) the contribution is:


(i) money; or

(ii) property that was purchased by the taxpayer during the 12 months before the contribution was made; and


(b) the value of the contribution is $2 or more; and


(c) the taxpayer is not a company; and


(d) the contribution is not a testamentary contribution.

Note:

Division 30 of the Income Tax Assessment Act 1997 deals with the deductibility of contributions made in the 1997-98 year of income or a later year of income.

78(10)  $100 annual limit for deductions for contributions to political parties.  


The total deductions allowable to a taxpayer under subsection (9) in respect of a year of income must not exceed $100.

78(11)  Deductions for pensions, gratuities or retiring allowances to ex-employees etc.  


An amount paid by a taxpayer in the 1996-97 income year or an earlier income year as a pension, gratuity or retiring allowance to a person who is or was an employee or a dependant of an employee is an allowable deduction for the year of income in which it was paid. However:


(a) it is an allowable deduction under this subsection only to the extent that, in the Commissioner's opinion, it is paid in good faith in consideration of the past services of the employee in any business operations that were carried on by the taxpayer for the purpose of gaining or producing assessable income; and


(b) it is not an allowable deduction under this subsection if it is an allowable deduction under any other provision of this Act.

Note:

Section 25-50 of the Income Tax Assessment Act 1997 deals with the deductibility of amounts paid as pensions, gratuities or retiring allowances in the 1997-98 year of income or a later year of income.

78(12)  Value of property for the purposes of subsections (4) and (5).  


For the purposes of subsections (4) and (5), the value of a gift of property is:


(a) if:


(i) the property is trading stock of the taxpayer to which subsection 36(1) applies; and

(ii) the taxpayer has not made, and does not make, an election under subsection 36(3) or section 36AAA in relation to the property;
the value of the property that is, because of subsection 36(1) , included in the taxpayer's assessable income; or


(b) in any other case - whichever is the lesser of:


(i) the value of the property at the time of the making of the gift; or

(ii) the amount paid by the taxpayer for the property.

78(13)  Gifts of property covered by subsections (6), (7) and (8) - special valuation conditions.  


For the purposes of subsections (6), (7) and (8), a taxpayer complies with the special valuation conditions in relation to a gift of property if:


(a) both:


(i) assuming that the taxpayer had sold the property instead of making the gift, any profits or proceeds from the sale would have been included in the taxpayer's assessable income; and

(ii) the making of the gift does not result in an amount being included in the taxpayer's assessable income; or


(b) all of the following conditions are satisfied:


(i) the taxpayer gives the Commissioner 2 or more written valuations stating the amount that, in the opinion of the person making the valuation, was:

(A) the value of the property at the time when the gift was made; or

(B) if the valuation was made not earlier than 90 days (or such longer period as the Commissioner allows) before, and not later than 90 days (or such longer period as the Commissioner allows) after, the day on which the gift was made - the value of the property at the time when the valuation was made;

(ii) the valuations are by persons each of whom was, at the time of making the valuation, an approved valuer in relation to property of the kind concerned;

(iii) the written valuations are given to the Commissioner:

(A) with the taxpayer's return of income for the year of income in which the gift was made; or

(B) if more than one such return is given - with the first return; or

(C) within such further period as the Commissioner allows.

78(14)  Value of gift - subsections (6), (7) and (8).  


Subject to subsection (15) (which deals with conditional gifts), for the purposes of subsections (6), (7) and (8), the value of a gift of property is as follows:


(a) if both:


(i) assuming that the taxpayer had sold the property instead of making the gift, any profits or proceeds from the sale would have been included in the taxpayer's assessable income; and

(ii) the making of the gift does not result in an amount being included in the taxpayer's assessable income;
the value of the gift is:

(iii) if the taxpayer purchased the property - the amount paid by the taxpayer for the property; or

(iv) if the taxpayer created or produced the property - the amount equal to so much of the cost of creating or producing the property as would have been allowed as a deduction to the taxpayer if the property had been sold by the taxpayer;


(b) if paragraph (a) does not apply and the taxpayer:


(i) acquired the property within 12 months before the making of the gift otherwise than as a result of:

(A) a will, a codicil or an order of a court that varied or modified the provisions of a will or codicil; or

(B) an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who died intestate; or

(ii) acquired the property for the purpose of making a gift of the property to, or subject to an eligible agreement that the property would be gifted to:

(A) a Fund, authority or institution mentioned in subsection (6) for inclusion in its collection, or any of its collections; or

(B) the Commonwealth for inclusion in the collection, or any of the collections, of Artbank; or

(C) a body mentioned in subsection (8);
the value of the gift is whichever is the lesser of:

(iii) the amount (if any) paid by the taxpayer for the property; or

(iv) the amount that, assuming that this paragraph and subsection (15) had not been enacted, would be the value of the gift;


(c) if neither paragraph (a) nor paragraph (b) applies:


(i) if the Commissioner is of the opinion that an amount equal to the average of the values specified in the valuations given to the Commissioner under subsection (13) in relation to the property fairly represents the value of the property as at the time when the gift was made - the value of the gift is that amount; or

(ii) in any other case - the value of the gift is the amount that the Commissioner considers was the value of the property as at the time when the gift was made.

78(15)  Value of conditional gift - subsections (6), (7) and (8).  


For the purposes of subsections (6), (7) and (8), if:


(a) the terms and conditions on which a gift of property is made are such that the recipient does not:


(i) receive immediate custody and control of the property; or

(ii) have the unconditional right to retain custody and control of the property in perpetuity; or

(iii) obtain an immediate, indefeasible and unencumbered legal and equitable title to the property; or


(b) the Commissioner is satisfied that the custody, control or use of the property by the recipient is affected by an eligible agreement entered into in association with the making or receipt of the gift;

the value of the gift is the value worked out under subsection (14), reduced by such amount as the Commissioner considers reasonable having regard to the effect on the value of the gift of those terms and conditions or of that eligible agreement.

78(15A)  Value of gift - subsection (6A).  


For the purposes of subsection (6A), the value of a gift of property is the amount specified in the certificate given by the Minister for Communications and the Arts undersubsection (6B) in relation to the gift.

78(16)  Apportionment of deduction under subsection (6), (7) or (8) - joint ownership.  


If:


(a) a taxpayer (the ``first taxpayer'' ) owns property jointly with one or more other taxpayers; and


(b) the owners make a gift of the property; and


(c) assuming that:


(i) the property had been owned by the first taxpayer alone; and

(ii) the gift had been made by the first taxpayer;
the gift would have been an allowable deduction under subsection (6), (7) or (8);

the first taxpayer is entitled to an allowable deduction of so much of the amount of the deduction that would have been allowable as mentioned in paragraph (c) as the Commissioner considers reasonable having regard to the interest of the taxpayer in the property.

78(16A)  Testamentary gifts made at time of death.  


To avoid doubt, a testamentary gift is taken to be made at the time of death of the taxpayer who made the gift.

78(17)  Value of property for the purposes of subsection (9).  


For the purposes of subsection (9), the value of a contribution of property is whichever is the lesser of:


(a) the value of the property at the time of the contribution; or


(b) the amount paid by the taxpayer for the property.

78(18)  Approval of valuer.  


The Secretary to the Department of the Arts and Administrative Services may, by signed instrument, approve a person as a valuer in relation to a particular kind of property. In deciding whether to give an approval, the Secretary to that Department must have regard to:


(a) the person's qualifications, experience and knowledge in relation to the valuation of property of that kind; and


(b) the person's knowledge of current market values of property of that kind; and


(c) the person's standing in the professional community; and


(d) any other matters that the Secretary to that Department considers relevant.

78(19)  Approval of organisations for the purposes of eligible funds declaration.  


The Minister for Foreign Affairs may, by signed instrument, approve an organisation as an approved organisation for the purposes of subsection (21).

78(20)  Certification of country for the purposes of eligible funds declaration.  


The Minister for Foreign Affairs may, by signed instrument, certify a country to be a developing country for the purposes of subsection (21).

78(21)  Declaration of eligible funds.  


If the Treasurer is satisfied that a fund:


(a) is a fund established by an approved organisation (whether or not the organisation was an approved organisation at the time when the fund was established); and


(b) is exclusively for the relief of persons in a certified country or certified countries (whether or not that country was a certified country, or those countries were certified countries, at the time when the fund was established);

the Treasurer may, by notice in the Gazette , declare it to be an eligible fund for the purposes of item 9.1.1 of table 9 in subsection (4).

78(22)  Eligible funds declaration - effective date.  


A notice under subsection (21) must specify the date on which the notice has effect. The date must not be earlier than the date on which the notice is published in the Gazette .

78(23)  Revocation of eligible funds declaration.  


The Treasurer may, by notice in the Gazette , revoke a declaration under subsection (21). The notice of revocation must specify the date on which it has effect. The date of effect must not be earlier than the date on which the notice of revocation is published in the Gazette .

78(24)  Approval of marriage guidance organisations.  


If the Attorney-General is satisfied that:


(a) an organisation, or a branch or a section of an organisation, is willing and able to engage in marriage guidance; and


(b) marriage guidance constitutes, or will constitute, the whole or the major part of the activities of the organisation, branch or section, as the case may be;

the Attorney-General may, by signed instrument, approve the organisation, branch or section, as the case may be, for the purposes of item 8.1.1 of table 8 in subsection (4).

78(25)  Special conditions applicable to gifts made to certain environmental bodies.  


The following are the special conditions mentioned in various items in table 6 in subsection (4):


(a) at the time the gift is made, the institution must have agreed to give to the Department of the Environment, Sport and Territories, within a reasonable period after the end of the financial year in which the gift was made, statistical data about gifts made to the institution during the financial year;


(b) at the time the gift is made, the institution must have a policy of not acting as a mere conduit for the donation of money or property to other institutions, bodies or persons.

78(25A)  Disallowable instruments.  


The following are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 :


(a) guidelines made under subsection (6C); and


(b) determinations under paragraph (6E)(a).

78(26)  Definitions.  


In this section:

"approved organisation" means an organisation approved under subsection (19);

"approved valuer" , in relation to a particular kind of property, means a person in respect of whom there is in force under subsection (18) an approval of the person as a valuer in relation to that kind of property;

"certified country" means a country certified under subsection (20) to be a developing country for the purposes of this section;

"certified facilities" , in relation to a college or institution, means facilities (including residential accommodation) in respect of which the Minister for Employment, Education and Training has certified, by signed instrument, that he or she is satisfied are, or are to be, used wholly or principally for certified purposes of the college or institution;

"certified purposes" , in relation to a college or institution, means purposes of the college or institution that have been certified by the Minister for Employment, Education and Training, by signed instrument, to relate exclusively to tertiary education;

"eligible agreement" means an agreement, arrangement or understanding:


(a) whether formal or informal; and


(b) whether express or implied; and


(c) whether or not enforceable by legal proceedings (whether or not the agreement, arrangement or understanding was intended to be so enforceable);

"eligible rural school hostel building" means a building where:


(a) the building is used, or to be used, solely or principally as a residential accommodation for students whose usual place of residence is in a rural area and who are undertaking:


(i) primary or secondary education courses; or

(ii) special education programs for children with disabilities;
at a school or schools in the same locality as the residential accommodation; and


(b) the capital or recurrent costs of the school or schools are funded (in whole or in part) by the Commonwealth, a State or a Territory; and


(c) the residential accommodation is provided by:


(i) the Commonwealth, a State or a Territory; or

(ii) a public authority; or

(iii) a company that:

(A) is not carried on for the purposes of profit or gain to its individual members; and

(B) is, by the terms of the company's constituent document, prohibited from making any distribution, whether in money, property or otherwise, to its members;

"property" does not include money;

"value" , in relation to money, means the amount of money.


 



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