Editor: The ATO is currently offering various support measures to individuals and businesses from drought-affected communities to help with managing their tax and super obligations or who are struggling with their mental health.
It has also recently provided a summary of the potential tax impact of making donations to or raising funds via a crowdfunding platform for drought relief (as outlined below).
For taxpayers wishing to contribute to a drought relief fund, it is important to be aware of the tax implications associated with making such donations.
For example, donations of $2 or more to an organisation that is a deductible gift recipient will be tax deductible.
To check to see if an appeal is a registered charity, the ATO has advised that taxpayers should use the ‘ABN lookup’ function on the Australian Business Register website before donating.
For those looking to raise funds through crowdfunding platforms to assist their farming business, payments received from the crowdfunding platforms may be assessable income, depending upon how the funds are used.
For example:
- Where the funds are used for emergency relief (i.e., such as food and clothing), then the amounts are not assessable.
- Where the funds are spent on deductible expenses (i.e., such as purchasing feed for livestock), the amount is assessable income but will be offset by the relevant deductions obtained, ensuring there is no net taxable outcome.
* * * Disclaimer: The information is sourced from NTAA. * * *
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their circumstances.
