Claiming political contributions and gifts
Political parties are not DGRs. However, in some circumstances, gifts and contributions made by individuals to political parties and independent candidates and members may be claimed as income tax deductions. If an individual wants to claim a tax deduction for their contribution or gift to a political party, independent candidate or independent member:
- the recipient must be either
- a political party registered under Part XI of the Commonwealth Electoral Act 1918 or under corresponding state or territory legislation
- an individual who is or was an independent member of – or who is an independent candidate for – the Commonwealth Parliament, a state parliament, the Legislative Assembly of the Northern Territory or the Legislative Assembly for the Australian Capital Territory
- they must make the contribution or gift as an individual in their personal capacity and not in the course of carrying on a business
- their contribution or gift must be $2 or more and be of either
- property that they purchased during the 12 months before making the contribution or gift.
Taxpayers can't claim a deduction for testamentary contributions and gifts, that is, those made under a will.
Registered political parties
If a taxpayer pays a membership subscription to a registered political party, they can claim a deduction for this as a contribution.
Independent candidates and members
An independent candidate is one whose candidature is not endorsed by a political party registered under the Commonwealth Electoral Act 1918 or under corresponding state or territory electoral legislation. The term includes an endorsed candidate of an unregistered political party.
An independent member is one who is not a member of a political party that is registered under Part XI of the Commonwealth Electoral Act 1918 or under corresponding state or territory legislation. The term includes a member of an unregistered political party.
If a taxpayer makes a contribution or gift to an independent candidate in an election, they must make it in the period:
- from the time the candidates for the election are officially declared or announced
- until either the
- candidate makes public their intention to no longer be a candidate
- result of the election is officially declared or announced.
In the rare situation of an election wholly failing, the latter date changes to when the candidates are officially declared or announced for the replacement election.
For an independent member, the contribution or gift must be made in the period:
- starting when the individual is an independent member (starting when the individual’s election is officially declared or announced), or
- finishing when the individual ceases to be an independent member because either the
- parliament, a house of the parliament or the legislative assembly is dissolved or has reached its maximum duration
- individual comes up for election.
This only applies until the candidates for the resulting election are officially declared or announced.
Individuals making personal donations
The individual claims their tax deduction for a political contribution or gift in the tax return for the income year in they made the contribution or gift.
The most that they can claim in an income year is:
- $1,500 for contributions and gifts to political parties
- $1,500 for contributions and gifts to independent candidates and members.
The amount of the deduction for a contribution or gift of property is either the market value of the property on the day the contribution or gift was made or the amount the individual paid for the property, whichever is less.
A deduction for a contribution or gift cannot add to or create a tax loss.
Example – Donating to political parties, independent members and candidates
During the 2014–15 income year, John contributes in his personal capacity $500 and $1,500 respectively to two registered political parties. He also gifts $200, $600 and $1,100 respectively to two independent candidates and one independent member.
John may claim a tax deduction of $3,000 in his 2014–15 tax return:
- $1,500 for the $2,000 contributed to political parties
- $1,500 for the $1,900 gifted to the independent candidates and the independent member.