ATO Interpretative Decision
ATO ID 2013/62
Income tax
School building fund established and maintained by a church - no trust deed-
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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is a school building fund that is established and maintained by a church an Australian Charities and Not-for-profits Commission (ACNC) type of entity as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No, where the school building fund is not established by trust deed the school building fund is not an 'ACNC type of entity'.
Facts
A church conducts a school. The church has an Australian Business Number, and is registered under the Australian Charities and Not-for-profits Commission Act 2012.
The church establishes and maintains a school building fund solely for the purpose of providing money for the acquisition, construction or maintenance of buildings used by the school.
The school building fund is not established by trust deed or other written declaration of trust. The school building fund is established as a public fund in accordance with the fund rules set out in the constituent documents of the school. There is no declaration of trust in relation to the assets of the school building fund in these documents.
Reasons for Decision
Subdivision 30-B of the ITAA 1997 sets out the funds, authorities and institutions which are eligible to receive deductible gifts.
In order for a fund to satisfy item 2.1.10 of the table in subsection 30-25(1) of the ITAA 1997:
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- it must be a public fund established and maintained solely for the purpose of providing money for the acquisition, construction or maintenance of a building used as a school or college
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- the building must be used as a school or college by a government, a public authority or a non-profit society or association as described in item 2.1.10 and
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- the fund must be registered under the Australian Charities and Not-for-profits Commission Act 2012, or not be an 'ACNC type of entity' as defined in the ITAA 1997.
Section 995-1 of the ITAA 1997 defines the phrase ACNC type of entity to mean:
an entity that meets the description of a type of entity in column 1 of the table in subsection 25-5(5) of the Australian Charities and Not-for-profits Commission Act 2012.
The term 'entity' is defined in section 960-100 of the ITAA 1997 to include a trust. The term 'trust' is not defined in the ITAA 1997.
The church has not manifested an intention to create the school building fund as a separate trust. In the absence of the church entering into a trust deed or other written declaration of trust as part of the establishment of the school building fund, there is no indication that the church intended to create a trust over any particular property in these circumstances.
The school building fund is not a trust. The school building fund is not any other type of entity listed in section 960-100 of the ITAA 1997. The school building fund is therefore not an entity within the meaning of that term under section 960-100 of the ITAA 1997.
Consequently, the school building fund is not an 'ACNC type of entity' as defined in section 995-1 of the ITAA 1997.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 10 September 2018 | Issue, Facts, Reason for Decision | Minor punctuation amendments |
| 10 June 2016 | Issue, Facts, Reason for Decision | Minor punctuation amendments |
Year of income: Year ending 30 June 2014
Legislative References:
Income Tax Assessment Act 1997
Subdivision 30-B
subsection 30-25(1)
section 960-100
section 995-1
subsection 25-5(5)
Related Public Rulings (including Determinations)
Taxation Ruling TR 2013/2
ATO ID 2013/60
ATO ID 2013/61
Keywords
school building funds
deductible gift recipients
associations, organisations and societies
entities and taxpayer groups
Date reviewed: 8 August 2018
ISSN: 1445-2782
| Date: | Version: | |
| 18 November 2013 | Original statement | |
| You are here | 10 June 2016 | Updated statement |