![]() NEWSLETTER SEPTEMBER 2012 |
Peregian Accounting Services Unit 3 12 Grebe Street Peregian Beach Q 4573 |
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It seems like the Australian economy is holding its breath at the moment, waiting to see what happens with China's economic slowdown and with commodity prices. Although the large Australian producers of iron ore achieved record levels of production in the first half of the year, and production is expected to increase further in the coming year, there have been sharp recent falls in iron ore and coking coal spot prices, with other commodity prices also having been relatively flat over the past few months.
This "wait and see" attitude towards our economy was reflected in the RBA's recent decision to hold the cash rate at 3.5%, where they outlined an imminent period of adjustment in markets for key natural resources, a subdued international financial outlook and overall predictions that Australia's growth will continue on trend, with inflation remaining low so long as domestic prices are restrained. In Tax News |
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Charitable Donations - Not Always Deductible
1. Deductible Gift Recipients (DGRs) Organisations can be DGRs in their own right, or just for the operation of a specific fund or institution. Most major charities are DGRs in their own right, for example the Cancer Council Queensland, but organisations such as school P&Cs often maintain separate building funds with DGR status that can accept tax-deductible donations, where the main P&C body cannot. To check if an organisation is a DGR, go to the Australian Business Register and search on the organisation's ABN. Its DGR status is recorded under the heading 'Deductible gift recipient status' on the 'Current details for ABN:' page. 2. Genuine gifts Genuine gifts must involve a transfer of money (or property) that is made voluntarily with no material benefit or advantage received by the donor. It must also arise by way of benefaction, meaning it is an act of goodwill. Raffle and art union tickets are commonly, and incorrectly, claimed as donations when they ought not be as they give a material benefit: a chance of winning something. Similarly, purchasing chocolates, pens or other low cost items are not tax deductible as you received something for your money. Payments to school building funds as an alternative to an increase in school fees are not deductible. If you provide your professional services free of charge to a DGR the donation of your time is not deductible (because it is a service and not money or property), although supplies you purchase that become the property of the DGR may be deductible. In limited circumstances, you may be able to receive something and still deduct the donation, such as if you receive acknowledgement for your donation in the school newsletter, or if you receive a lapel pin or ribbon for your donation to a DGR (the ATO does not see these as a material benefit). 3. Money and types of property Only cash donations over $2 are deductible. Types of property that have ATO fact sheets available to explain the circumstances under which they are deductible are: property you purchased less than a year before donating, trading stock, property worth over $5,000, shares in a listed public company valued at $5,000 or less, cultural gifts and heritage gifts. Testamentary gifts (gifts made from a deceased person's will) are not deductible. 4. Gift conditions Sometimes donations can only be deductible between certain dates or for a specific use. For example, a war memorial reconstruction fund may have a gift condition stating that gifts must be made within two years from the date of DGR endorsement. If you make a donation after the two years have elapsed you may not deduct the donation. Another example is gifting to public authorities for health research; your gift is only tax deductible if it is for research into the causes, prevention or cure of disease. Gifts for other purposes, such as to support the administration of the public authority, may not be deductible. Many DGRs have no gift conditions, but they are more common in certain areas such as international aid and health research, and in cultural organisations. This is not an exhaustive reference for gift giving and tax deductions, for more information (eg on workplace giving and political contributions) see Making tax deductible gifts and contributions. If you have any feedback or suggestions for our newsletter please email us at newsletter@adaptive.net.au Until our next contact
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