Donate your shares
In the Federal Budget handed down on 9 May 2006, the Treasurer announced that the Government would allow taxpayers to claim a tax deduction for the donation to a deductible gift recipient (DGR) of publicly listed shares that have been held for at least 12 months and are valued at $5,000 or less. These changes were legislated in June 2007, and apply for the 2007/2008 tax year and each following year.
Individuals gifting shares can deduct the market value of the shares on the day they make the gift, provided the shares:
- Were acquired at least 12 months before making the gift;
- Have a market value of $5,000 or less;
- Were acquired in a listed public company; and
- Are listed for quotation on the official list of an Australian Stock Exchange.
The shares can be acquired through a number of means including purchase, inheritance, winnings, a gift or a bonus.
The disposal of shares to the charity is still a capital gains tax (CGT) event, and individuals who choose to donate shares are still subject to GST.
Where a person wishes to gift a parcel of shares acquired in the last 12 months, a deduction is available in certain circumstances. A deduction can be claimed for the lesser of the market value of the shares on the day the gift was made and the amount paid for those shares.
A deduction is also allowed for the contributions of shares by a donor made in return for a right permitting the donor or someone else to attend or participate in a particular fundraising event must not exceed 20% of the value of the shares or $150, whichever is less. If these criteria are satisfied, the individual can deduct the market value of the shares on the day they make the contribution less GST inclusive market value of the right to attend the fundraising event.
The explanatory memorandum to the legislation includes the following example.
‘Martin contributes a parcel of shares to a DGR that were acquired 18 months ago in a public listed company. In return Martin is given a ticket to attend the DGR’s annual gala dinner fundraising event.
At the time Martin contributed the shares, they had a market value of $1,000. The GST inclusive market value of the right to attend the fundraising event is $100.
Martin can claim a tax deduction for $900, which is the market value of the shares ($1,000) less the GST inclusive market value of the right to attend the fundraising event ($100).’
If you would like to donate your shares to Cystic Fibrosis Queensland, contact us on 3359 8000 or email .
