Senate

Revised 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 amends Division 30 of the ITAA 1997 and section 78 of ITAA 1936. These amendments will allow an income tax deduction to a donor for certain gifts to the value of $2 or more to the funds and organisations listed in Table 1.1.

1.2 The amendments also make minor changes to give effect to certain organisations' changes of name and to extend the period of deductibility for other organisations.

Summary of new law

1.3 The amendments will allow income tax deductions for certain gifts to the value of $2 or more made to the following funds and organisations from, and including, the day of announcement.

1.4 The amendments also reflect the change the name of the funds, authorities or institutions, as listed in Table 1.2. This will ensure that each organisation continues to qualify for gift deductibility status from, and including, the date of effect of the name change.

1.5 Further, the amendments extend the period of income tax deductibility for the two organisations as listed in Table 1.3. This will ensure that the organisations continue to qualify for gift deductibility status for the period shown.

Detailed explanation of new law

1.6 The funds, authorities and institutions listed in paragraphs 1.7 to 1.13 have been included in the tables in the gift provisions of the ITAA 1997. Gifts of $2 or more to these organisations will allow a donor to claim the gift as an income tax deduction.

1.7 The Aboriginal Education Council (N.S.W) Incorporated has been established for the advancement of Aboriginal people in NSW through the provision of greater educational opportunities at all levels. This is achieved by providing educational scholarships and educational resources and the funding of educational projects for indigenous people. [Schedule 1, item 2, subsection 30-25(2)]

1.8 The General Sir John Monash Foundation has been established to raise funds to administer the General Sir John Monash Awards, which will recognise the highest academic achievement and aim to attract potential national leaders in their chosen fields. [Schedule 1, item 2, subsection 30-25(2)]

1.9 The Mount Macedon Memorial Cross Trust has been established to restore, develop, protect and maintain the Mount Macedon Memorial Cross to commemorate the service and sacrifice of Australia's servicemen and women. [Schedule 1, item 4, subsection 30-50(2)]

1.10 The Manly Warringah War Memorial Regional Park Remembrance Trust has been established to raise funds to establish a unique War Memorial feature in Manly Warringah War Memorial Regional Park. This War Memorial feature will acknowledge all personnel who gave their lives, served or who are serving in Australia in the armed forces and civilian support services throughout the years and includes those who work and strive for world peace. [Schedule 1, item 4, subsection 30-50(2)]

1.11 The Shrine of Remembrance Foundation has been established to raise funds for the establishment, management and maintenance of the Galleries of Remembrance and other educational, operational and management functions at the Shrine of Remembrance in Melbourne. [Schedule 1, item 4, subsection 30-50(2)]

1.12 The Australian Council of Children and Youth Organisations Inc. has been established to assist and empower disadvantaged children and young people by establishing and operating a regulatory framework and accreditation system which is recognised by the wider community. [Schedule 1, item 9, section 30-105]

1.13 St Paul's Cathedral Restoration Fund has been established to raise money for the restoration, refurbishment and improvement of St Paul's Anglican Cathedral, Melbourne and in particular for important repair and restoration work to the Cathedral spires. [Schedule 1, item 9, section 30-105]

Changes of names

1.14 This Schedule updates the tables in Subdivision 30-B to reflect the change of name of two organisations.

1.15 The Royal Society for the Prevention of Cruelty to Animals (Victoria) has changed its name to Royal Society for the Prevention of Cruelty to Animals (Victoria) Inc. from 9 January 1992. [Schedule 1, item 1, subsection 78(4) of the ITAA 1936; Schedule 1, item 3, subsection 30-45(2)]

1.16 The Nursing Mothers' Association of Australia has changed its name to Australian Breastfeeding Association from 1 August 2001. [Schedule 1, items 5 and 6, subsection 30-70(2)]

Extension of period of deductibility

1.17 This Schedule extends the period of deductibility for two organisations.

1.18 Income tax deductions for gifts to Australia for UNHCR are currently allowable for gifts made before 28 June 2002. Deductibility of gifts has been extended for a further five years. Gifts made before 28 June 2007 will now be deductible. [Schedule 1, item 7, subsection 30-80(2)]

1.19 Income tax deductions for gifts to the St Patrick's Cathedral Parramatta Rebuilding Fund are currently allowable for gifts made before 25 February 2002. Deductibility of gifts has been extended for a further two years. Gifts made before 25 February 2004 will now be deductible. [Schedule 1, item 8, section 30-105]

Update to index

1.20 The index to the Division is also updated to include the new funds, authorities and institutions. [Schedule 1, items 10 to 19, subsection 30-315(2)]

Application and transitional provisions

1.21 The amendments apply from the dates of the press releases shown in Table 1.1 and Table 1.3.

1.22 The amendments contained in Table 1.2 apply from the date of effect of the change of name.