House of Representatives

Taxation Laws Amendment Bill (No. 7) 2000

Explanatory Memorandum

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

Chapter 1 Income tax deductions for gifts

Outline of Chapter

1.1 Schedule 1 to this Bill will amend the Income Tax Assessment Act 1997 (ITAA 1997) to:

allow income tax deductions for gifts of $2 or more to a number of funds and organisations, listed in paragraph 1.6;
extend the period of time within which gifts to the Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust Fund are tax deductible; and
update the index to the gift provisions for the new funds and organisations.

Background to the legislation

1.2 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.

1.3 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, or specifically listed under one of those general categories. Second, it may be specifically listed in Division 30, either in the Register of Environmental Organisations or the Register of Cultural Organisations which are kept under Subdivisions 30-E and 30-F respectively.

1.4 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.

Summary of new law

1.5 The amendments will allow income tax deductions for donations made to the following funds and organisations:

the Community Disaster Relief (Sydney Hail Storm Assistance) Fund;
the Australian Ex-Prisoners of War Memorial Fund;
The Global Foundation;
the United Hellenic Earthquake Appeal;
the Foundation for Gambling Studies;
the Foundation for Rural and Regional Renewal Public Fund;
the RSL and 6th Division Australian-Hellenic Educational Memorial Fund; and
the Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust Fund.

Comparison of key features of new law and current law

1.6 The amendments will allow income tax deductions for donations made to the following funds and organisations.

Fund/ organisation Proposed section and item reference New law special conditions Current law special conditions
Community Disaster Relief (Sydney Hail Storm Assistance) Fund 30-45(2) item 4.2.17 The gift must be made after 14 April 1999 and before 15 April 2001. N/A
Australian Ex-Prisoners of War Memorial Fund 30-50(2) item 5.2.9 The gift must be made after 19 October 1999 and before 20 October 2001. N/A
The Global Foundation 30-80(2) item 9.2.8 The gift must be made after 2 November 1999. N/A
United Hellenic Earthquake Appeal 30-80(2) item 9.2.9 The gift must be made after 6 September 1999 and before 7 September 2000. N/A
Foundation for Gambling Studies 30-25(2) item 2.2.19 The gift must be made after 8 March 2000. N/A
Foundation for Rural and Regional Renewal Public Fund 30-105 item 13.2.2 The gift must be made after 28 March 2000. N/A
RSL and 6th Division Australian-Hellenic Educational Memorial Fund 30-50(2) item 5.2.10 The gift must be made after 13 June 2000 and before 14 June 2002. N/A
Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust Fund 30-50(2) item 5.2.8 The gift must be made after 30 June 2000 and before 1 July 2001. The gift must be made after 8 February 1998 and before 9 February 1999.

Detailed explanation of new law

1.7 It was announced in Assistant Treasurer's Press Release No. 24 of 27 May 1999 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to the Community Disaster Relief (Sydney Hail Storm Assistance) Fund.

1.8 The Community Disaster Relief (Sydney Hail Storm Assistance) Fund has been established to raise money for those affected by the severe hail storm that caused wide spread damage to parts of Sydney in April of 1999. [Schedule 1, item 2]

1.9 It was announced in Assistant Treasurer's Press Release No. 27 of 28 June 1999 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to the Australian Ex-Prisoners of War Memorial Fund.

1.10 The Australian Ex-Prisoners of War Memorial Fund has been established to raise funds for a national memorial to be erected in the city of Ballarat. The objective of the memorial project is to promote community recognition of the service and sacrifice made by Australian prisoners of war. [Schedule 1, item 4]

1.11 It was announced in Assistant Treasurer's Press Release No. 50 of 3 November 1999 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to The Global Foundation.

1.12 The Global Foundation is a non-profit organisation established to promote and encourage Australia's national development and international orientation, with a particular focus on the nation's Centenary of Federation. It is a citizens' initiative which brings together the expertise and influence of eminent people. [Schedule 1, item 5]

1.13 It was announced in Assistant Treasurer's Press Release No. 59 of 8 December 1999 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to the United Hellenic Earthquake Appeal.

1.14 The United Hellenic Earthquake Appeal has been established to raise money for the victims of the earthquake tragedy that devastated Athens in September 1999. [Schedule 1, item 5]

1.15 It was announced in Assistant Treasurer's Press Release No. 10 of 8 March 2000 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to the Foundation for Gambling Studies.

1.16 The Foundation for Gambling Studies has been established to support independent research on gambling, which is a growing industry in Australia. The Foundation's activities include funding scholarships and commissioning research. Reliable and independent research will assist the Government and the community to develop policies relating to gambling. [Schedule 1, item 1]

1.17 It was announced in Assistant Treasurer's and Deputy Prime Minister's joint Media Release No. 11 of 29 March 2000 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to the Foundation for Rural and Regional Renewal Public Fund.

1.18 The Foundation for Rural and Regional Renewal Public Fund has been established to raise money for the purpose of providing a viable social and economic future for Australia's rural and regional communities. It aims to encourage innovative collaboration between business, community and government in philanthropic endeavours that will boost the economic and social stocks of regional Australia. Its emphasis will be on economic development and job creation. [Schedule 1, item 6]

1.19 It was announced in Assistant Treasurer's Press Release No. 24 of the 26 May 2000 that the Government intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to the RSL and 6th Division Australian-Hellenic Educational Memorial Fund. This was conditional on the fund satisfying the usual public fund requirements.

1.20 The Assistant Treasurer's Press Release No. 25 of 14 June 2000 advised that the RSL and 6th Division Australian-Hellenic Educational Memorial Fund has been established to raise money to assist, each year, a deserving Greek citizen in the island of Crete, who is under the age of 25 years, to undertake tertiary education. Gifts of $2 or more to the fund after 13 June 2000 will be deductible for income tax purposes. [Schedule 1, item 4]

1.21 The Government has agreed to amend the ITAA 1997 to extend gift deductibility status for a period of one year to the Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust Fund.

1.22 The Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust Fund has been established to raise money for the ongoing maintenance of the Mount Macedon Memorial Cross. The Cross was built in 1934-1935 to commemorate the memory of those who served in the Great War, and is considered to be one of the most significant war memorials in Victoria. [Schedule 1, item 3]

Application and transitional provisions

1.23 The amendments will apply from the date of Royal Assent of this Bill.


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