House of Representatives

Tax Laws Amendment (2007 Measures No. 2) Bill 2007

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello MP)

Chapter 5 - Deductible gift recipients

Outline of chapter

5.1 Schedule 5 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to update the list of deductible gift recipients (DGRs) to include two new entities and to extend the time period of DGR status for one entity. This Schedule also reflects a name change of one entity listed as a DGR under section 30-65 of the ITAA 1997.

Context of amendments

5.2 The income tax law allows taxpayers who make a gift of $2 or more to DGRs to claim income tax deductions. To be a DGR, an organisation must fall within a category of organisations set out in Division 30 of the ITAA 1997, or be listed by name under that Division.

5.3 DGR status assists relevant funds and organisations to attract public support for their activities.

Summary of new law

5.4 These amendments add two organisations to the list of specifically listed DGRs and extend the time period for which deductions are allowed for gifts to The Finding Sydney Foundation. Gifts of $2 or more, made to these entities within each entity's eligible time period, are tax deductible.

5.5 The amendments also update the ITAA 1997 to reflect a name change of one entity specifically listed as a DGR.

Detailed explanation of new law

5.6 Schedule 5 lists the organisations in Table 5.1 as DGRs. [Schedule 5, items 3 to 6]

Table 5.1
Name of fund Date of effect Special conditions
American Australian Association Limited 14 November 2006
Bunbury Diocese Cathedral Rebuilding Fund 19 December 2006 The gift must be made before 19 December 2008.

5.7 The American Australian Association Limited was established to promote friendship, cooperation and understanding between Australia and the United States of America. The American Australian Association Limited intends to establish a United States Studies Centre at an Australian university, and facilitate education scholarships and programmes, conferences and seminars, cultural events and other activities to further the American Australian Association Limited's objectives. [Schedule 5, items 3 and 5]

5.8 St Patrick's Cathedral in Bunbury was destroyed by a tornado on 16 May 2005. St Patrick's Cathedral is a significant landmark and spiritual centre for a large number of people in Western Australia's South West, Great Southern, and South Coastal regions. DGR specific listing has been provided to the Bunbury Diocese Cathedral Rebuilding Fund to assist in rebuilding the cathedral. [Schedule 5, items 4 and 6]

Extending periods for which gifts are deductible

5.9 Schedule 5 also extends the period for which deductions are allowed for gifts to the organisation listed in Table 5.2. [Schedule 5, item 1]

Table 5.2
Name of fund New special conditions Current special conditions
The Finding Sydney Foundation The gift must be made after 26 August 2004 and before 28 August 2007. The gift must be made after 26 August 2004 and before 27 August 2006.

5.10 The Finding Sydney Foundation was established to search for the HMAS Sydney and the German auxiliary cruiser HSK Kormoran, that disappeared off the Western Australian coast on 19 November 1941, and to establish a virtual memorial to the sailors, the vessels, and the engagement. The loss of the HMAS Sydney with its crew of 645 remains one of Australia's greatest wartime mysteries. [Schedule 5, item 1]

Reflecting a name change of a specifically listed DGR

5.11 Currently, Indigenous Community Volunteers Limited is listed under its previous name, Voluntary Service to Indigenous Communities Foundation. This Schedule updates the ITAA 1997 to reflect its name change to Indigenous Community Volunteers Limited. [Schedule 5, items 2, 7 and 8]

5.12 Indigenous Community Volunteers Limited offers support to Indigenous communities to pursue their community development goals in their own way, by matching the skills and interests of volunteers with specific projects and skill needs identified by Indigenous communities and organisations. [Schedule 5, items 2, 7 and 8]

Application and transitional provisions

5.13 The amendments to list the organisations in Table 5.1 apply from the dates of effect shown in those tables. [Schedule 5, items 1 and 3 to 6]

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