Income Tax Assessment Amendment Regulations 2002 (No. 2) 2002 No. 65
EXPLANATORY STATEMENT
STATUTORY RULES 2002 No. 65
Issued by authority of the Minister for Revenue and Assistant Treasurer
Income Tax Assessment Act 1997
Income Tax Assessment Amendment Regulations 2002 (No. 2)
Section 909-1 of the Income Tax Assessment Act 1997 (the Act) provides that the GovernorGeneral may make regulations prescribing matters that the Act requires or permits to be prescribed, or are necessary or convenient to prescribe for carrying out or giving effect to this Act.
The purpose of the regulations is to amend the Income Tax Assessment Regulations 1997 to list certain funds as prescribed private funds so that gifts made to these funds are tax deductible.
Section 995-1 of the Act defines a "prescribed private fund" as a fund that is prescribed by the Regulations for the purposes of the definition but does not include any fund that has been declared by the Treasurer, in writing, not to be a prescribed private fund.
Item 2 in the table to section 30-15 of the Act provides that a gift made to a prescribed private fund is deductible where the fund is established and maintained under a will or instrument of trust solely for
(a) the purpose of providing money, property or benefits to a fund, authority or institution gifts to which are deductible under item 1 of this table and for any purposes set out in the item of the table in Subdivision 30-B that covers the fund, authority or institution; or
(b) the establishment of such a fund, authority or institution.
Subdivision 30-B of the Act lists the tables of recipients for deductible gifts.
Regulation 995-1.02 lists the following funds as prescribed private funds for the purposes of section 995-1 of the Act. Each of the funds listed is a prescribed private fund on and from the date of effect specified in the regulations. Each fund is established and maintained for the purpose of providing money, property or benefits to a fund, authority or institution that is listed either by name or by type in a table to Subdivision 30-B of the Act.
Name of fund | Date of effect |
Hunter Hall Charitable Fund | 16 August 2001 |
The International Children's Foundation | 23 August 2001 |
The Brian and Maxine Newell Prostrate
Cancer Research Foundation | 17 September 2001
|
Barrie Bailey Foundation | 3 October 2001 |
The Rotary Club of Hillarys Community
Foundation | 3 October 2001
|
The Western Australian Club Foundation | 3 October 2001 |
The sole purpose of each Fund is to provide money, property or benefits to or for eligible charities, or for the establishment of eligible charities, as the Trustee decides.
'Eligible charity' is defined in each Fund's Trust Deed to mean a fund, authority or institution which is charitable at law and gifts to which are deductible under item 1 (a fund, authority or institution covered by an item in any of the tables in Subdivision 30-B) of the table to section 3015 of the Act.
The amending regulations have effect from dates approved by the Government and shown above in the table. While these are earlier than the date of gazettal for each fund, subsection 48(2) of the Acts Interpretation Act 1901 is not contravened. Subsection 48(2) prohibits the retrospective operation of regulations that adversely affect the rights of, or impose liabilities upon, a person. The regulations are beneficial to the funds concerned and taxpayers making donations to those funds.
The regulations commenced on gazettal.
Details of the regulations are as follows:
Regulation 1: Names the regulations.
Regulation 2: Provides that the regulations commenced on gazettal.
Regulation 3: Provides that Schedule 1 amends the regulations to list certain funds as prescribed private funds.
Schedule 1: This inserts the names of certain funds as prescribed private funds (items 24 to 29 inclusive) into Regulation 995-1.02 for the purposes of Division 30 of the Act.
Overview
The Income Tax Assessment Amendment Regulations 2002 (No. 2) were enacted to amend the Income Tax Assessment Regulations 1997, allowing certain funds to be listed as prescribed private funds. This was authorised under section 909-1 of the Income Tax Assessment Act 1997, enabling the Governor-General to make regulations necessary to carry out or give effect to the Act. The policy objective of these regulations is to ensure that gifts made to specified funds are tax-deductible, provided the funds meet the criteria of being established and maintained under a will or instrument of trust solely for the purpose of providing money, property or benefits to eligible charities or for the establishment of such charities. These regulations were issued by authority of the Minister for Revenue and Assistant Treasurer and took effect from the dates specified in the regulations themselves, aligning with the policy intent to support charitable contributions while ensuring compliance with the Acts Interpretation Act 1901 to avoid retrospective adverse effects on individuals or entities.
Scope and Application
The Income Tax Assessment Amendment Regulations 2002 (No. 2) applies to individuals and entities seeking to claim tax deductions for gifts made to certain specified funds. These regulations were made under the authority of the Income Tax Assessment Act 1997 and aim to amend the Income Tax Assessment Regulations 1997 by listing specific funds as prescribed private funds, thus enabling donors to claim a tax deduction for gifts made to these funds. The listed funds include the Hunter Hall Charitable Fund, The International Children's Foundation, The Brian and Maxine Newell Prostrate Cancer Research Foundation, Barrie Bailey Foundation, and The Rotary Club of Hillarys Community Foundation, among others, each established for the purpose of providing money, property, or benefits to eligible charities. The regulations apply nationally across Australia, and the funds listed are recognised as prescribed private funds from the dates specified in the regulations, which are earlier than the date of gazettal to avoid any retrospective adverse effects on rights or liabilities.
Key Provisions
The key provisions of the Income Tax Assessment Amendment Regulations 2002 (No. 2) revolve around the specification of certain funds as prescribed private funds under section 995-1 of the Income Tax Assessment Act 1997 (the Act). Regulation 995-1.02 lists these funds, which include the Hunter Hall Charitable Fund, The International Children's Foundation, The Brian and Maxine Newell Prostate Cancer Research Foundation, Barrie Bailey Foundation, and The Rotary Club of Hillarys Community Foundation, among others. These funds are recognised as prescribed private funds from specific dates, which precede the date of gazettal of the regulations, as detailed in Schedule 1. This means that donations made to these funds are eligible for tax deductions, provided they are made for the purpose of benefiting a deductible gift recipient as defined in Subdivision 30-B of the Act.
The obligations imposed by these regulations on the parties involved primarily centre on the proper maintenance and administration of these funds. The funds must adhere to the conditions set forth in their trust deeds, ensuring that their activities align with the purpose of providing benefits to eligible charities or for the establishment of such charities. This includes maintaining records and documentation that demonstrate compliance with the Act and the regulations, ensuring that donations are used in accordance with the stipulated purposes. Trustees of these funds have a responsibility to ensure that the funds are used for charitable purposes and to report any breaches of the regulations to the relevant authorities.
Failure to comply with the provisions of the regulations may result in various consequences. Firstly, any fund that does not maintain its activities strictly for the prescribed charitable purposes may lose its status as a prescribed private fund. This loss of status means that donations made to the fund will no longer be tax-deductible, potentially impacting the fund's ability to attract contributions. Additionally, there could be legal repercussions for trustees who fail to adhere to the regulations, including potential fines or other penalties as stipulated by the Act. The severity of the penalties will depend on the nature and extent of the breach, with maximum penalties available for serious or repeated violations.