Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)Chapter 5: Deductible gift recipients
Outline of chapter
5.1 Schedule 5 to the Bill amends the ITAA 1997 to list Skip Foundation Ltd as a deductible gift recipient. The Schedule also amends the ITAA 1997 to remove eight deductible gift recipients.
5.2 Schedule 5 to the Bill amends the ITAA 1997 to remove as deductible gift recipients:
- •
- Don Chipp Foundation Ltd;
- •
- The Ian Clunies Ross Memorial Foundation;
- •
- Ian Thorpe's Fountain for Youth Limited;
- •
- Layne Beachley - Aim for The Stars Foundation Limited;
- •
- National Congress of Australia's First Peoples Limited;
- •
- Sir William Tyree Foundation;
- •
- SouthCare Helicopter Fund; and
- •
- Lingiari Policy Centre.
Context of amendments
5.3 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to deductible gift recipients. To be a deductible gift recipient, an organisation must fall within one of the general categories set out in Division 30 of the ITAA 1997 or be listed by name in that Division. Unless otherwise stated, all references to legislation in this Chapter are to the ITAA 1997.
5.4 Deductible gift recipient status helps eligible organisations attract public financial support for their activities.
5.5 Skip Foundation Ltd (ABN 44 673 342 455) is a charity that aims to promote equality of opportunity, advancing health, protecting and restoring the natural environment and stimulating and promoting philanthropy to charities and for charitable purposes.
Summary of new law
5.6 Schedule 5 to the Bill amends the ITAA 1997 to list Skip Foundation Ltd as a deductible gift recipient under the income tax law. Schedule X to the Bill also amends the ITAA 1997 to remove eight entities as deductible gift recipients under the income tax law.
Detailed explanation of new law
5.7 Taxpayers may no longer claim an income tax deduction for gifts made to Don Chipp Foundation Ltd (ABN 60 008 618 488). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 3, table item 3.2.9 in subsection 30-40(2)]
5.8 Taxpayers may no longer claim an income tax deduction for gifts made to the Ian Clunies Ross Memorial Foundation (ABN 85 004 450 686). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 3, table item 3.2.2 in subsection 30-40(2)]
5.9 Taxpayers may no longer claim an income tax deduction for gifts made to Ian Thorpe's Fountain for Youth Limited (ABN 87 094 955 290). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 4, table item 4.2.40 in subsection 30-45(2)]
5.10 Taxpayers may no longer claim an income tax deduction for gifts made to Layne Beachley - Aim for the Stars Foundation Limited (ABN 72 101 890 340). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 5, table item 13.2.4 in subsection 30-105(2)]
5.11 Taxpayers may no longer claim an income tax deduction for gifts made to National Congress of Australia's First Peoples Limited (ABN 47 143 207 587). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 4, table item 4.2.42 in subsection 30-45(2)]
5.12 Taxpayers may no longer claim an income tax deduction for gifts made to Sir William Tyree Foundation (ABN 55 067 867 510). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 2, table item 2.2.18 in subsection 30-25(2)]
5.13 Taxpayers may no longer claim an income tax deduction for gifts made to SouthCare Helicopter Fund (ABN 68 084 155 895). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 1, table item 1.2.14 in subsection 30-20(2)]
5.14 Taxpayers may no longer claim an income tax deduction for gifts made to Lingiari Policy Centre (ABN 55 114 489 020). This amendment removes the deductible gift recipient status of the entity.
[Schedule 5, item 3, table item 3.2.10 in subsection 30-40(2)]
5.15 Taxpayers may claim an income tax deduction for gifts made to Skip Foundation Ltd (ABN 44 673 342 455) provided the gift complies with the existing requirements of the income tax law. The gift must be made after 1 July 2024 and on or before 30 June 2029. This amendment ensures that Skip Foundation Ltd receives public financial support for its activities.
[Schedule X, item 6, table item 13.2.47 in subsection 30-105(2)]
Consequential amendments
5.16 Schedule 5 to the Bill also amends the index in Subdivision 30-G of the ITAA 1997 to reflect the amendments.
[Schedule 5, items 7, 8 and 9, table items 45AAA, 60, 65AA, 67A, 73B, 111AA and 111B in section 30-315]
Commencement
5.17 Schedule 5 to the Bill commences the first day of the first quarterly period following Royal Assent.
[Clause 2]
Application
5.18 The amendments apply to gifts made after 30 June 2024 and before 1 July 2029 to the Skip Foundation Ltd.
[Schedule 5, item 6, table item 13.2.47 in subsection 30-105(2)]
5.19 The amendment to list Skip Foundation Ltd as a deductible gift recipient applies retrospectively. This ensures that if gifts are made to Skip Foundation Ltd prior to the commencement of this Schedule but after the application of the amendments, they qualify for a tax deduction for income tax purposes, provided they comply with other requirements of the income tax law.
5.20 Despite the retrospective application of deductible gift recipient status to Skip Foundation Ltd, there is no adverse impact on affected parties or the entity as the amendment is wholly beneficial. This is because the amendments assist entities to obtain support from the public and allow parties that provide gifts to obtain an income tax deduction if eligibility requirements are met.