A gift is not really a gift if you get a benefit as a result of it.
Inland Revenue says the payment must be voluntary and there must be no “identifiable direct valuable benefit” arising or may arise as a result of the payment.
If a non-profit body receives a true gift then they don’t pay GST.
On the other hand, if it is not a true gift because there is a benefit, GST has to be paid on the money received.
If you are involved with any organizations that are GST registered, which receives “gifts” of money, make sure there isn’t anything given in return for the “gift” or you will be liable for GST.
Gifts should only be made to persons for whom you have ‘natural love and affection’, such as your children or parents, or to a trust which has beneficiaries for whom you have ‘natural love and affection’.
No income tax would be payable in these situations.
If you are uncertain about a gift as to the tax implications, please do not hesitate to give us a call at KTS to discuss it.