Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Chapter 3 - Income tax deductions for gifts etc.
Overview
3.1 Schedule 3 to this Bill will amend the Income Tax Assessment Act 1997 (ITAA 1997) to:
- •
- allow income tax deductions for gifts to The Linton Trust; and
- •
- extend the period of time within which gifts to The National Nurses Memorial Trust will be tax deductible.
3.2 The amendments apply to gifts made to:
- •
- The Linton Trust after 2 December 1998 and before 3 December 2000; and
- •
- The National Nurses Memorial Trust made before 4 January 2000.
3.3 Broadly, Division 30 of the ITAA 1997 provides deductions for gifts of $2 or more to various funds, authorities or institutions. A deduction is allowable in the year of income in which the gift is made.
3.4 A fund or other body can be granted tax deductible gift status in 2 ways. First, it may qualify under one of the general categories listed in Division 30, for example, the general category of education. Second, it may be specifically listed either in Division 30 or in the Register of Environmental Organisations or the Register of Cultural Organisations, kept under Subdivisions 30-E and 30-F respectively.
3.5 In some circumstances, deductibility for a gift to a fund or organisation may only be available if the gift is made during a period specified in the law, for example, gifts to war memorials specifically listed in the Defence category are usually deductible for a period of 2 years only.
Explanation of the amendments
3.6 On 27 May 1999 the Assistant Treasurer announced that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to The Linton Trust.
3.7 The Linton Trust was established to provide assistance to the families of 5 firemen who died fighting bushfires in Victoria on 2 December 1998.
3.8 The Linton Trust will be specifically listed in the Welfare and Rights table. Gifts made after 2 December 1998 and before 3 December 2000 will be tax deductible. [Item 1]
3.9 The Linton Trust will be included in the index to Division 30 of the ITAA 1997 which lists the funds, authorities and institutions which have gift deductibility status. [Item 3]
The National Nurses Memorial Trust
3.10 On 10 August 1999 the Assistant Treasurer announced that the period within which donations to The National Nurses Memorial Trust are deductible would be extended for a period of 4 months.
3.11 The National Nurses Memorial Trust was established to raise money for the construction of an Australian Service Nurses memorial on Anzac Parade, Canberra. The memorial will commemorate nurses who have served in war and otherwise in the service of Australia.
3.12 Currently gifts of $2 or more made to The National Nurses Memorial Trust are eligible for tax deductions under subsection 30-50(2) of the ITAA 1997. The special condition for the Trust requires the gift to be made after 3 September 1997 and before 4 September 1999.
3.13 This Bill will amend the special condition so that the period of gift deductibility is extended for 4 months to gifts that are made before 4 January 2000. [Item 2]