HOUSE OF REPRESENTATIVES

EXPLANATORY MEMORANDUM

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 8 - Income tax deductions for gifts

Outline of chapter

8.1 Schedule 9 to this bill amends Division 30 of the ITAA 1997 and section 78 of the ITAA 1936. These amendments will allow an income tax deduction to a donor for certain gifts to the value of $2 or more to a number of funds and organisations listed in Table 8.1.

8.2 The amendments also make minor changes to give effect to certain organisations change of name, to extend the period of deductibility for certain organisations and to terminate the period of deductibility where an organisation has ceased to exist.

Summary of new law

8.3 The amendments will allow income tax deductions for certain gifts to the value of $2 or more made to the funds and organisations listed in Table 8.1 from, and including, the day of announcement.

Table 8.1

8.4 The amendments also change the name of a fund, authority or institution, as listed in Table 8.2, where that organisation has changed its name. This will ensure the organisation continues to qualify for gift deductibility status from, and including, the date of effect.

Table 8.2

8.5 In addition, the amendments terminate the tax deductibility status of an organisation, as listed in Table 8.3, that has formally ceased to exist. This will ensure the organisation no longer qualifies for gift deductibility status.

Table 8.3

8.6 Further, the amendments extend the period of tax deductibility for 2 organisations as listed in Table 8.4. This will ensure the organisations continue to qualify for gift deductibility status for the periods shown.

Table 8.4

Detailed explanation of new law

8.7 The funds, authorities and institutions mentioned in paragraphs 8.8 to 8.18 have been included in the tables in the gift provisions of the income tax law. Gifts of $2 or more to these organisations will allow the donor to claim that gift as an income tax deduction.

8.8 The National Breast Cancer Centre Gift Fund has been established to work directly with women, health professionals, cancer organisations, researchers and governments to improve breast cancer outcomes for women. It will also strive to reduce the mortality from breast cancer and improve the wellbeing of women who are diagnosed with the disease. [Schedule 9, item 9, subsection 30-20(2)]

8.9 The Bionic Ear Institute will raise funds to undertake research into understanding the hearing system, hearing loss and to develop clinical therapies that help hearing impaired people. [Schedule 9, item 9, subsection 30-20(2)]

8.10The Australian Human Rights Education Fund has been established to raise funds to maintain and provide human rights education programs at the national, regional and local levels. These programs will strengthen respect for human rights and fundamental freedoms in Australian society. [Schedule 9, item 12, subsection 30-25(2)]

8.11 The Australian Primary Principals Association Education Foundation has been established to raise funds to assist primary and middle school principals and their communities to help students improve learning outcomes, to improve the students quality of life and to enhance their successful contribution to Australian society and future Australian generations. [Schedule 9, item 12, subsection 30-25(2)]

8.12 The Hughie Edwards VC Foundation Incorporated will raise funds for the construction of a monument in the city of Fremantle to the memory of Sir Hughie Edwards VC, the most highly decorated Australian airman of World War II. [Schedule 9, item 20, subsection 30-50(2)]

8.13 Warringah, Australia Remembers Trust has been established to help perpetuate the memory of the deeds of Australians who participated in World War II. To achieve this objective, this Trust will produce a high quality educational video recording World War II experiences of past and present Warringah residents. It will also fund a permanent prize for a competition amongst students on a theme relating to World War II. The funds collected by this Trust will also be used to erect a new memorial or monument expressly commemorating the contribution of Australians to World War II. [Schedule 9, item 20, subsection 30-50(2)]

8.14 The Bowral Vietnam Memorial Walk Trust Incorporated has been established to raise funds to provide a memorial for the recognition, comfort and benefit of the veterans of the Vietnam War and their families. [Schedule 9, item 20, subsection 30-50(2)]

8.15 The Albert Coates Memorial Trust has been established to raise funds to establish living memorials to honour Sir Albert Coates who served in 2 World Wars with distinction. This Trust has constructed a statue of Sir Albert in the city of Ballarat. This Trust will now fund scholarships each year to medical graduates and/or assist a student in Ballarat, as well as establish other memorials appropriate to honouring the legacy of Sir Albert Coates by the education and inspiration of young people in Australia. [Schedule 9, item 20, subsection 30-50(2)]

8.16 The Tea Gardens/Hawks Nest War Memorial Committee has been established to raise funds to build a war memorial in the town of Tea Gardens, NSW. This Memorial will honour those who gave their lives in the service of Australia and those who gave their lives in the service of humanity, starting from Federation and following on in perpetuity. [Schedule 9, item 20, subsection 30-50(2)]

8.17 The Australian Red Cross Society American Disaster Fund will provide funds to provide relief to the victims of the disaster in the United States of America where, on 11 September 2001, 4 passenger planes were hijacked by terrorists and crashed into 3 buildings killing thousands of people. The victims of the disaster include the persons directly involved in the disaster and the persons indirectly involved such as families, friends and colleagues. [Schedule 9, item 22, subsection 30-80(2)]

8.18 The Young Endeavour Youth Scheme Public Fund offers a challenge to our youth through structured sail training programs that create a difference in their lives and, through them, their communities. [Schedule 9, item 23, section 30-105]

Change of names

8.19 This bill updates the tables in Subdivision 30-B to reflect the change of name of 7 organisations.

8.20 H.R.H. The Duke of Edinburghs Commonwealth Study Conferences (Australia) Incorporated has changed its name to Commonwealth Study Conferences (Australia) Incorporated from 20 February 2001. [Schedule 9, item 11, subsection 30-25(2)]

8.21 Australian Administrative Staff College has changed its name to Monash Mt Eliza Graduate School of Business and Government Limited from 22 July 1994. [Schedule 9, items 2, 3 and 5, subsections 78(3) and (4) of the ITAA 1936]

8.22 Then, Monash Mt Eliza Graduate School of Business and Government Limited changed its name to Mt Eliza Graduate School of Business and Government Limited from 5 April 2000. [Schedule 9, items 10 and 12, subsection 30-25(2)]

8.23 Amnesty International changed its name to Amnesty International Australia from 1 July 1985. [Schedule 9, items 1 and 6, subsections 78(3) and (4) of the ITAA 1936; item 13, subsection 30-45(2) of the ITAA 1997]

8.24 National Safety Council of Australia changed its name to National Safety Council of Australia Limited from 14 September 1993. [Schedule 9, items 4 and 7, subsections 78(3) and (4) of the ITAA 1936; item 14, subsection 30-45(2) of the ITAA 1997]

8.25 Royal Queensland Society for the Prevention of Cruelty changed its name to Royal Society for the Prevention of Cruelty to Animals, Queensland Incorporated from 23 December 1999. [Schedule 9, items 15 and 17, subsection 30-45(2) of the ITAA 1997]

8.26 Victorian National Parks Association changed its name to Victorian National Parks Association Incorporated from 18 March 1985. [Schedule 9, item 8, subsection 78(4) of the ITAA 1936; item 21, subsection 30-55(2) of the ITAA 1997]

Cessation of period of deductibility

8.27 This bill terminates the deductibility status for the Katherine District Business Re-establishment Fund from 18 November 2000. [Schedule 9, item 16, subsection 30-45(2)]

Extension of period of deductibility

8.28 This bill extends the period of deductibility for 2 organisations.

8.29 Donations to the Australian Ex-Prisoners of War Memorial Fund are currently allowable for gifts made before 19 October 2001. Deductibility of gifts is being extended for a further 2 years and can now be made until 19 October 2003. [Schedule 9, item 18, subsection 30-50(2)]

8.30 Gifts made to the Royal Australian Airforce (RAAF) Memorial Trust Fund have been extended for a further one year. Currently, the donation had to be made before 18 November 2001. Gifts made until 17 November 2002 will now be deductible. [Schedule 9, item 19, subsection 30-50(2)]

Update to index

8.31 The index to the Division is also updated to include the new funds, authorities and institutions. [Schedule 9, items 24 to 40, section 30-315]

Application and transitional provisions

8.32 The amendments apply from the dates shown in Tables 8.1 and 8.4.

8.33 The amendments contained in Tables 8.2 and 8.3 apply from the date of effect of the change of name or from when the fund was dissolved.