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Income tax: are gifts to approved funds deductible under subsection 78(4) or subsection 78(5) of the Income Tax Assessment Act 1936 if the donor receives a material benefit in return?

Preamble

No, to be a 'gift' for taxation purposes, the money or property must be given voluntarily and the donor must not receive any material benefit ( FC of T v. McPhail (1968) 117 CLR 111). The receipt of something of trifling or insubstantial value, such as a sticker, is not a material benefit.

Where a material benefit is received, the payment is not a 'gift' and is therefore not tax deductible.

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