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  • Application to reduce the minimum ancillary fund distribution rate

    Under amended Private Ancillary Fund Guidelines 2009 and Public Ancillary Fund Guidelines 2011, a fund may apply to the Commissioner of Taxation to reduce the minimum annual distribution for an ancillary fund.

    Requests to reduce the minimum distribution rate for a financial year will only be considered if your fund has met all its annual lodgment obligations.

    How to apply

    To access a reduced rate, you must apply to us in writing by completing the Application to reduce the minimum ancillary fund distribution rate (NAT 74894, PDF, 270KB).

    See also:

    Completing your application

    When we refer to a 'fund' in these instructions, we are referring to an ancillary fund.

    When we refer to 'you' in these instructions, we are referring to you as the trustee of the ancillary fund.

    Requests to reduce the minimum distribution rate for a financial year will only be considered if your fund has met all its annual lodgment obligations.

    Penalties may be imposed for giving false or misleading information

    Who should use this application

    Public or private ancillary funds seeking an amendment to reduce the minimum annual distribution rate due to unusual circumstances.

    How to complete the application form

    1. Name of fund

    Insert your ancillary fund’s legal name here. Your ancillary fund’s legal name is the name that appears on all your fund’s official documents and legal papers.

    2. Australian business number of fund

    Insert the Australian business number of your ancillary fund.

    3. Current postal address

    Insert your current postal address here.

    4. Contact person for this application

    This must be an authorised contact person on our records.

    Include the business hours phone number and email address for the contact person (in case we need to seek clarification or further information).

    5. Financial year

    Insert the financial year for which you wish to access a lower minimum distribution rate (the relevant year).

    6. Value of the fund's net assets at the end of the financial year immediately before the relevant year

    Insert the value in dollars of the fund’s net assets at the end of the financial year immediately before the relevant year (this should equal the figure in the ancillary fund return for that year).

    7. Amount the fund needs to distribute to meet the standard minimum distribution rate for the relevant year

    Insert the amount, in dollars, that the fund would need to distribute to meet the standard minimum distribution rate for the relevant year.

    Public ancillary funds are required to distribute at least four per cent of the market value of the fund’s net assets (as at the end of the previous financial year).

    Private ancillary funds are required to distribute at least five per cent of the market value of the fund’s net assets (as at the end of the previous financial year).

    8. The distribution rate that you propose

    Insert the distribution rate (can't be reduced to zero) you propose for the relevant year as a percentage of the fund's assets for that year, and the total amount of the proposed distribution (in dollars).

    9. Anticipated/actual returns

    Insert the amount, in dollars, of the actual returns received by the fund in the relevant year. Where the relevant year has not finished you may provide anticipated returns.

    10. Your reasons for seeking to reduce the fund's distribution below the usual minimum distribution for the relevant year

    Provide the reasons you are seeking to reduce the fund’s distribution for the relevant year.

    You will need to address each of the items in Guideline 19.7.3 that applies to your request. In determining whether to reduce the rate and what the reduced rate should be, the Commissioner must have regard to:

    • the general market conditions in Australia
    • the past, current and expected levels of returns from the fund’s investments
    • the long-term impact on the assets of the fund from not reducing the rate for a financial year
    • the level of distributions made by the fund in previous financial years
    • the investment strategy and distribution strategy of the fund
    • the size of the fund
    • the compliance history of the fund and the trustee
    • the fees and expenses of the fund
    • the terms and other circumstances relating to any gift to the fund under a will
    • any other matter the Commissioner considers relevant.

    Declaration

    Once you have completed the form you must read the declaration.

    When you are sure the information you have provided in the application is accurate and complete, you should sign and date the declaration.

    The declaration must be signed by a trustee, director or public officer authorised to sign on behalf of the trustee.

    Incomplete declaration details may delay the processing of your application.

    You must also include with your application:

    • a copy of your fund's current investment strategy and the investment strategy for the relevant year (if different)
    • a copy of the fund's audited financial statements preceding the relevant year.

    If you need help filling out the application form, phone us on 1300 130 248 between 8.00am and 6.00pm, Monday to Friday.

    Privacy

    We are authorised by taxation law to collect the information on this form and disclose it to other government agencies. This includes the personal information of the person authorised to sign the declaration.

    See also:

      Last modified: 10 Jan 2018QC 48923