Issue
Is the taxpayer entitled to a deduction under section 30-15 of the Income Tax Assessment Act 1997 (ITAA 1997) for the donation of gift vouchers to a deductible gift recipient (DGR)?
Decision
No. The taxpayer is not entitled to a deduction under section 30-15 of the ITAA 1997 for the donation of gift vouchers to a DGR because the gift vouchers were not purchased by the taxpayer.
Facts
The taxpayer received gift vouchers valued between $2 and $5,000 as a result of redeeming points under a consumer loyalty program.
Within 12 months of receiving the gift vouchers the taxpayer donated them to a DGR.
Reasons for Decision
Section 30-15 of the ITAA 1997 enables the taxpayer to claim a deduction for certain types of gifts of $2 or more, made to a DGR. It allows a deduction for a gift of property other than money, where property valued at less than $5,000 is purchased by the taxpayer during the 12 months before making the gift. Where the taxpayer does not purchase the property within the above 12 months period, a deduction will be allowable if the gift of property is valued by the Commissioner at more than $5,000.
The gift vouchers awarded to the taxpayer under the consumer loyalty program are in the nature of property other than money for the purposes of section 30-15 of the ITAA 1997. To be deductible, the above section requires that a gift of property valued at less than $5,000 be purchased by the taxpayer during the 12 months before making the gift. The word 'purchase' is not defined in the tax legislation. According to The Macquarie Dictionary , 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW, the ordinary meaning of purchase is 'to acquire by the payment of money or its equivalent; buy'.
In this case, the gift vouchers were not actually purchased but were granted to the taxpayer for their participation in the consumer loyalty program. As the gift of property does not satisfy the requirements of section 30-15 of the ITAA 1997, the donation of gift vouchers to a DGR is not an allowable deduction.