Top tips: Tax boosts for charity

5:00AM Sunday May 04, 2008
By Paul Brown

Paul Brown, national director, of ChildFund New Zealand, talks about changes to tax rules around charitable donations.

What changes have there been to tax laws around donations from individuals?
Previously, as an individual, you could claim a tax rebate of 33.3 per cent on cash donations to approved charities up to $1890 in one tax year. For donations made from April 1, individuals can claim a tax rebate of 33.3 per cent up to their total income. Under the new rules, a $3000 donation will give a donor a tax rebate of $1000.

What changes have there been to tax laws around donations from companies?
Companies have had the upper limit of 5 per cent of their income removed as the threshold for donations. From the 2009 tax year, businesses can claim a tax deduction on donations up to their net income. Small businesses with five or fewer shareholders are also included in the company deduction for the first time.

What impact have these changes had on donations?
They should increase the size and frequency of donations, and encourage high-income earners to donate more. Since removing the limit on eligible donations, Australia has seen charitable giving by individuals increase 58 per cent. Business-giving has followed a similar trend.

Source: http://www.nzherald.co.nz