Income Tax Assessment Amendment Regulations 2006 (No. 3)

EXPLANATORY STATEMENT

Select Legislative Instrument 2006 No. 306

Issued by authority of the Minister for Revenue
and Assistant Treasurer

Income Tax Assessment Act 1997

Income Tax Assessment Amendment Regulations 2006 (No. 3)

Subsection 909-1(1) of the Income Tax Assessment Act 1997 (the Act) provides that the Governor-General 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 the Act.

Subsection 995-1(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 or his delegate, in writing, not to be a prescribed private fund.

A prescribed private fund is a fund listed in the table under regulation 995-1.02 of the Income Tax Assessment Regulations 1997 (the Principal Regulations) on and from the date specified in that table.

The purpose of the Regulations is to replace the table under regulation 995-1.02 to take account of changes approved by the Minister since 15 December 2005, when that regulation was last updated.

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 of recipients for deductible gifts in Subdivision 30-B of the Act.

Item 2 in the table to section 30-15 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 the 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.

The Australian Taxation Office assesses funds that wish to be prescribed as ‘prescribed private funds’ against certain guidelines and then asks the Minister for Revenue and Assistant Treasurer to approve them for prescription in the Principal Regulations. The Minister for Revenue and Assistant Treasurer has approved the changes to the Principal Regulations described below.

The Regulations include prescribed private funds which were listed prior to 15 December 2005, subject to the following amendments.

The Regulations give effect to name changes of prescribed private funds, by listing them under their new names and prescribing a period of effect for the funds in regulation 995-1.02.

The Regulations also prescribe 112 new funds for the purposes of the definition of ‘prescribed private fund’ in regulation 995-1.02. The funds are listed in the Attachment. Each of the funds listed is a prescribed private fund on and from the date of effect specified in the Regulations.

The Regulations commence on the day of registration. However, they provide for different dates of effect for the funds, namely the dates of approval by the Government.

While these dates are earlier than the date of registration of the Regulations, subsection 12(2) of the Legislative Instruments Act 2003 is not contravened. Subsection 12(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 institutions and funds concerned and to taxpayers making donations to them.

The Regulations are administrative in nature, rather than regulatory, so are of a minor or machinery of government nature and do not substantially alter existing arrangements. Accordingly, a Regulation Impact Statement is not mandatory and has not been prepared.

As the Regulations are a machinery of government and do not substantially alter existing arrangements consultation was not required.

ATTACHMENT

Details of the proposed Income Tax Assessment Amendment Regulations 2006 (No. 3)

Regulation 1: Names the regulations as the Income Tax Assessment Amendment Regulations 2006 (No. 3).

Regulation 2: Provides that the regulations commence on the day after registration.

Regulation 3: Provides that Schedule 1 amends the Income Tax Assessment Regulations 1997 (the Principal Regulation).

Schedule 1: Amendments

Item 1 substitutes the previous table under regulation 995-1.02 of the Principal Regulations with an amended version.

Changes which have been approved by the Minister to regulation 995-1.02 are listed below.

The prescribed private fund listed as item 317 of regulation 995-1.02 formally changed its approved name from the Waterham Family Foundation to The Shine On Foundation and reappears as item 439 of regulation 995-1.02, with effect from 7 August 2006.

On 23 January 2006 the Minister for Revenue and Assistant Treasurer, the Hon Mal Brough MP declared the Ilhan Foundation, item 162 of regulation 995-1.02, not to be a prescribed private fund under subsection 995‑1(1) of the Act.  This has been reflected by the Ilhan Foundation having the period of effect finishing on 23 January 2006.

On 7 September 2006 the Minister for Revenue and Assistant Treasurer, the Hon Peter Dutton MP declared The Noble Foundation, item 18 of regulation 995-1.02, not to be a prescribed private fund under subsection 995‑1(1) of the Act.  This has been reflected by The Noble Foundation having the period of effect, finishing on 7 September 2006.

On 3 October 2006 the Minister for Revenue and Assistant Treasurer, the Hon Peter Dutton MP declared the Selim Foundation, item 130 of regulation 995-1.02, not to be a prescribed private fund under subsection 995‑1(1) of the Act.  This has been reflected by the Selim Foundation having the period of effect finishing on 3 October 2006.

The following list reflects those prescribed private funds which have been added to the table under regulation 995-1.02 since the table was last amended on 15 December 2005.