Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Chapter 2 - Extension of period for certain gifts
Outline of Chapter
2.1 Schedule 2 to this Bill will amend the ITAA 1997 to extend the period of time within which gifts to a number of funds, outlined in paragraph 2.6, are tax deductible.
Background to the legislation
2.2 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.
2.3 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. 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.
2.4 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 2years only. The amendments made by this Bill will extend the deductible period for 3funds.
Summary of new law
2.5 The amendments will extend the period for which donations to the following funds will be tax deductible:
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- the St Patrick's Cathedral Parramatta Rebuilding Fund;
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- the Australian National Korean War Memorial Trust Fund; and
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- the Shrine of Remembrance Restoration and Development Trust.
Comparison of key features of new law and current law
2.6 The amendments will extend the period during which gifts to the following funds will be tax deductible:
| Fund/organisation | Proposed section and item reference | New law special conditions | Current law special conditions |
|---|---|---|---|
| St Patrick's Cathedral Parramatta Rebuilding Fund | 30-105, Item 13.2.1 | The gift must be made before 25 February 2002 | The gift must be made before 25 February 2000 |
| Australian National Korean War Memorial Trust Fund | 30-50(2), Item 5.2.6 | The gift must be made before 2 September 2000 | The gift must be made before 2 September 1999 |
| Shrine of Remembrance Restoration and Development Trust | 30-50(2), Item 5.2.1 | The gift must be made before 1 July 2005 | The gift must be made before 1 July 1999 |
Detailed explanation of new law
2.7 The Shrine of Remembrance Restoration and Development Trust was established for the sole function of providing money for the benefit of the Shrine of Remembrance located in Melbourne. An extension of time has been granted to 30 June 2005 so that the Trust can continue to raise funds. [Schedule 2, item 1]
2.8 The Australian National Korean War Memorial Trust Fund was established to raise money for the construction of a memorial on Anzac Parade, Canberra. An extension of time has been granted to 1 September 2000 so that further funds can be raised. [Schedule 2, item 2]
2.9 St Patrick's Cathedral Parramatta Rebuilding Fund was established to raise money to rebuild the St Patrick's Cathedral, Parramatta which was destroyed by fire on 19 February 1996. An extension of time has been granted to 24 February 2002 so that the rebuilding of the Cathedral can progress. [Schedule 2, item 3]
Application and transitional provisions
2.10 The amendments will apply from the date of Royal Assent of this Bill.