philanthropyOz Blog

Tax Law Amendments

The Tax Laws Amendment (2007 Measures No. 2) Act 2007 received Royal Assent on 21 June 2007.

This Act has made technical amendments and corrections to the way the income tax law applies to exempt entities. The ATO has stated that the Act “will ensure that Public Ancillary Funds or Prescribed Private Funds do not lose their income tax exempt status if they distribute money to Commonwealth, State or Territory bodies which are exempt from tax and also deductible gift recipients”. It is important for members not to act on this legislative change at this stage, as there are a number of steps that will need to be undertaken first and the details have not yet been finalised. Philanthropy Australia is currently seeking further details on how the Act will apply to grants made by our members and on guidelines for members wishing to take advantage of the new provisions.

The Act also includes provisions to allow a tax deduction for donations of listed shares to deductible gift recipients; from 1 July 2007, a tax deduction is available for donations of listed shares valued at $5,000 or less and acquired at least 12 months before the gift was made. This provides another potential avenue for DGRs to raise funds.

Finally, the Act extends the thresholds for deductible contributions to fundraising events, applicable to contributions made on or after 1 January 2007.

Refer to http://www.ato.gov.au/nonprofit/content.asp?doc=/content/00102662.htm for more information. The Bill and its explanatory memorandum can also be viewed on the Parliament of Australia website at http://www.aph.gov.au/bills/index.htm. Select Current Bills (by Title), scroll through the list to Tax Laws Amendment (2007 Measures No. 2) Bill 2007 and select it.