Cultural heritage

• Please seek advice from your tax advisor or the Australian Taxation Office about spreading your deduction across a number of years. From 1 July 2020 you are no longer required to notify the Office for the Arts that you are seeking to spread your deduction over a number of years.
• For more information regarding record keeping requirements, please see:
  • Election to spread gift deduction
  • Record Keeping—Individuals
  • Record Keeping—Business

The Australian Tax Office (ATO) may vary or disallow the deductible amount when:

• the gift is donated with conditions that prevent or delay the institution having clear title, custody and control of it, or which involve benefits to the donor, other than the allowable tax concessions, or
• you donated the gift within 12 months of acquiring it (other than by inheritance), or the gift was acquired specifically for the purpose of donating it—the allowable deduction in either case will be restricted to the purchase price or the market value, whichever is the lesser amount, or
• donated items form part of the trading stock of either a dealer or an artist donating their own work.

• Despite the department's best efforts, the donation submission process may not always be finalised by your due date for lodging your tax return in the financial year you made the donation.
• If you are concerned with lodging your tax return, there is information available on the Australian Tax Office's website at: Time limits on tax return amendments | Australian Taxation Office (ato.gov.au) which may be of assistance.

• The Resale Royalty Scheme entitles visual artists to five per cent of the sale price when their artworks are commercially resold for over $1,000. Transfers of artwork made through the Cultural Gifts Program do not qualify as commercial resales under the Resale Royalty Scheme because money is not exchanged for the transfer.

• The date of donation is the date that determines in which financial year the donor can claim a tax deduction for the gift. For example, if the donation was made on 20 June 2024, the donor would claim a tax deduction for the 2023–2024 financial year.

• Donors are required to approach an institution about their donation and the institution will be able to assist them in applying through the Cultural Gits Program.

• The Cultural Gifts Program Guide states that: 'If items are removed from a collection this should be done in accordance with the institution's authorised deaccessioning policy. Donations made under the program should not be returned to the donor as the donor has already received the benefit of a tax deduction'.
• Your institutional policy should reflect this requirement of the Cultural Gifts Program in regards to deaccessioning and disposal of works received under the Program. There should be a clear statement that says donations made under the Cultural Gifts Program will not be returned to the donor if deaccessioned.

• No, institutions do not need to register with the Office for the Arts to participate. Public collecting institutions must be endorsed as a Deductible Gift Recipient (DGR) on the basis of being a public art gallery, museum or library (including archives) by the Australian Taxation Office (ATO).

• Institutions must select Cultural Gifts Program-approved valuers who are approved to value the class of property included in the donation. If there is any uncertainty about what class a donated item falls into, please contact the Cultural Gifts Program team before committing to the valuation.
• Within the Cultural Gifts Program, the approved classes for valuers are based on their area of expertise and knowledge. We consider Australian Indigenous art to be a specialist area within both art history and contemporary art. When seeking a valuer, institutions and donors should engage valuers who are approved to value Australian Indigenous art.
• On occasion, a one-off approval may be granted to a valuer to value items outside their regular approved classes. Approval for an ad-hoc extension of classes must be granted by the Cultural Gifts Program team prior to the valuer commencing a valuation. Information on one-off approvals can be found here: Cultural Gifts Program valuers | Office for the Arts.

• For applications that include overseas sales an invoice must be included in the application. Your institution must provide the exchange rate date. Prices stated in a foreign currency must be converted to Australian dollars (AUD) using the Reserve Bank of Australia's historical exchange rates, available at https://www.rba.gov.au/statistics/historical-data.html#exchange-rates. The formula is the purchase amount (eg US/EUR) divided by the rate on the exact date of purchase. When converting from foreign currency amounts, institutions should use the total price, which includes the buyer's premium AND the hammer price. GST does not need to be added to an overseas sale.

• The Valuation Certificate can be located here: Valuation Certificate—Cultural Gifts Program | Office for the Arts
• The Certificate of Donation can be located here: Certificate of Donation—Cultural Gifts Program | Office for the Arts

• The date of donation is the date that determines in which financial year the donor can claim a tax deduction for the gift. For example, if the donation was made on 20 June 2024, the donor would claim a tax deduction for the 2023–2024 financial year.

• Submission of large or complex donations

• Large donations template

• Breakdown of small items template

• The Valuation Certificate must include the GST-inclusive market value of the gift.

• The Valuation Certificate asks you to state the GST-inclusive market value of the gift within 90 days of the date of donation, regardless of when the valuation was carried out.

• Valuation Certificates must clearly set out how the value of an item was decided, including your valuation methodology. When completing a Valuation Certificate, valuers should expand on how they have arrived at the value for the donated item(s). Valuers are to undertake their own research and provide an accurate valuation, taking into consideration factors including:
  • size
  • complexity
  • condition
  • medium
  • context
  • desirability for collectors and demand for the item (including primary & secondary sales).
• In preparing your valuation, you should ensure that you undertake your own inquiries and assessments and do not rely on those of other valuers. It is particularly important that you act independently so that you cannot be taken to have colluded with other valuers.

• If evidence about primary or secondary comparable sales is unavailable, or if such evidence is limited when using your usual sources, such as an online database, valuers should utilise other sources as evidence to assist with their valuation.
• In the event that sales information for a particular artist is unavailable, it is acceptable to use comparable sales of the artist's peers using the same medium for comparison and context.

• Valuers must establish the GST-inclusive market value based on thorough and comprehensive research and available information, particularly recent sales information. If the donated item is a commissioned work and the artist only does commissions, the valuer must demonstrate the methodology used to value the donation.

• In providing a valuation, you should not provide advertised sales ('for sale' prices) in the primary or secondary sales tables of the Valuation Certificate. 'For sale' prices do not demonstrate market value, and cannot be substantiated.
• If there is no information available on actual sales of comparable item(s), you must explain how you used other material or information to establish your valuation.

• The Valuation Certificate for foreign sales must include the precise date of the sale. If the date of sale is on a weekend, valuers should use the exchange rate from the closest week day (Friday for Saturday and Monday for Sunday).
• Prices stated in a foreign currency must be converted to Australian dollars (AUD) using the Reserve Bank of Australia's historical exchange rates, available at https://www.rba.gov.au/statistics/historical-data.html#exchange-rates.The formula is the purchase amount (e.g. USD or EUR) divided by the rate on the exact date of purchase (eg USD / exchange rate = AUD).
• When converting from foreign currency amounts, valuers should use the total price, which includes the buyer's premium and the hammer price. GST does not need to be added to an overseas sale nor any other associated costs (eg shipping, etcetera).

We ask that valuers only value items that fall within their approved classes. If a valuer has any uncertainty about the class a donated item falls into, the valuer should contact the Cultural Gifts Program team before committing to the valuation.

• On occasion, one-off approval may be granted to a valuer to value items outside their approved classes. Approval for a one-off extension of classes must be granted by the Cultural Gifts Program team prior to commencing a valuation. Further information is available at https://www.arts.gov.au/what-we-do/cultural-heritage/cultural-gifts-program/cultural-gifts-program-valuers.

• Guidelines for valuing entomological (insect) collections