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The Government has announced several new measures to encourage philanthropy in the 2006-07 Budget. The following information has been extracted from Budget Paper Number 2.
Allow tax deductibility for the donation of certain publicly listed shares
'The Government will allow taxpayers to claim a tax deduction for the donation to a deductible gift recipient (DGR) of publicly listed shares that have been held for at least 12 months and are valued at $5,000 or less. This measure will have effect from the first income year after the date of Royal Assent of the enabling legislation.
Taxpayers will still be required to pay capital gains tax, or will be able to claim a capital loss, on any donated shares.'
Enhanced community support through the Foundation for Rural and Regional Renewal
'The Government will broaden the scope of the Foundation for Rural and Regional Renewal (FRRR) to allow it to receive tax deductible donations from regional community foundations and to use these funds exclusively for projects in those regions, with effect from 1 July 2007.
The FRRR will remain responsible for assessing all community-funded projects against the established FRRR criteria, and for ensuring that funded projects fall within the scope of the FRRR purposes.'
Providing Australian business numbers to certain prescribed private funds and public ancillary funds
'The Government will allow non-charitable prescribed private funds and non-charitable public ancillary funds to obtain an Australian business number (ABN), with effect from 1 July 2005.
Currently, such funds may be eligible to obtain deductible gift recipient (DGR) status but are unable to receive endorsement as a DGR unless they hold an ABN. This measure will allow these funds to obtain an ABN and therefore receive endorsement to obtain DGR status and an income tax exemption, where applicable.'
Remove gift fund requirements for certain deductible gift recipients
'The Government will streamline the gift fund arrangements for deductible gift recipients (DGRs) that are currently required to hold more than one gift fund, with effect from the first income year after the date of Royal Assent of the enabling legislation.
This measure will lower administrative costs for DGRs. An entity whose activities are endorsed or listed under multiple DGR categories will be able to consolidate these under a single gift fund. However, any activities of the entity not eligible for DGR status must remain in a separate fund.
DGRs would retain the option to continue with separate funds, although adequate accounting records would need to be maintained to demonstrate that gifted amounts are only used for the principal purpose for which DGR status was granted.'
Standardise compliance for deductible gift recipients
'The Government will extend the power of the Commissioner of Taxation to review the activities of specifically listed deductible gift recipients (DGRs) against the terms of their DGR status. This will take effect from the first income year after the date of Royal Assent of the enabling legislation.
This measure will make specifically listed DGRs subject to the same review provisions as DGRs endorsed under the general DGR categories. The Government and the Parliament will retain the power to approve (or revoke) the status of specifically listed DGRs.'
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For more information see the following press releases issued by the Minister for Revenue and Assistant Treasurer:
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This information has been published to the Non-Profit News Service to keep you up to date on key tax issues affecting the non-profit sector. Further updates will be provided in the Non-Profit News Service when these measures are legislated.
Last Modified: Wednesday, 17 May 2006