Ensure donations above board 20 Feb 2019

If you donate large sums to charity, you should check to ensure the entity is still approved by Inland Revenue. To find out, see:

You can pay donations through your company, but there must be a profit at the end of the year after deducting the donations. Losses resulting from donations paid are not tax deductible.

You can claim school donations, so long as they are not designated for a specific activity such as for your child to go on a school trip.

If your child goes to a state integrated school, you may be asked to make donations to various funds such as a building donations fund. These payments would be OK for claiming the rebate. The important issue is that the child cannot be banned from the school if the parent fails to pay the donation. This is a requirement for a school to be integrated.

For non-integrated schools, the general principle is that any donations made must be voluntary. If it is really in the nature of a fee for attending the school, the rebate is not claimable.

The New Zealand Herald reported recently “the vast majority of parents are not claiming the tax rebate for donations even though they are entitled to it”.

Part of the reason would appear to be many parents are on salaries and don’t have to put in a tax return. They are overlooking their entitlement to the donations rebate.

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