There are two different ways in which donors commonly make gifts in kind. The first of these is by providing services free of charge. These could be professional services (eg a solicitor or accountant), trade services (eg electrician or plumber), volunteers or other services.

Typically, these services are unpaid and are provided by way of gift in support of the organisation which is a deductible gift recipient (DGR). The supply of services as gifts in kind does not qualify as a donation because no money or property is transferred to the DGR.

So, a volunteer's expenses in carrying out voluntary work or the value of unpaid work do not constitute a gift.

In those circumstances, there is no tax deduction for the service and there is nothing to receipt. Should the organisation wish to acknowledge the contribution, it may choose to do so by way of a certificate of appreciation for example and may make reference to the estimated value of the gift in kind. This would not entitle the donor to a tax deduction.

The second circumstance in which gifts in kind are commonly made are gifts of property or trading stock. Where that property or trading stock was purchased by the donor during the 12 months before making the contribution, then the value of the donation is the lesser of:

1. the market value of the property on the date of the contribution is made; and
2. the amount the donor paid for the property.

A receipt should be issued for that amount.

However, where property was purchased by the donor more than 12 months earlier, the value of the property is determined by the Australian Valuation Office within the Tax Office.

Contact details for the Australian Valuation Office are:
Philanthropy Program
Australian Valuation Office
PO Box 911
DICKSON ACT 2602
Ph: (08) 8218 9008 or (02) 6229 3400
Fax: (08) 8212 6090 or (02) 6230 5060
Website: www.avo.gov.au

In that case, the receipt will be for the amount determined by the Australian Valuation Office as being the value of the donated gift.