Senate

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Ralph Willis, MP)

Chapter 5 - Deductions for gifts

Overview

5.1 This Chapter explains the amendments to the income tax gift provisions contained in Part 6 of Schedule 1 . The gift provisions list those funds, authorities and institutions which qualify for tax deductible gift status both by reference to the appropriate table headings and specifically in the tables.

Summary of the amendments

Purpose of the amendments

5.2 The amendments propose to allow income tax deductions for gifts of $2 or more made to certain organisations or funds. [Item 44]

Date of effect

5.3 The amendments will apply as shown in the summary below:

Background to the legislation

5.4 Broadly, section 78 of the Income Tax Assessment Act 1936 provides deductions for gifts of $2 or more to various funds and organisations. A deduction is allowable in the year of income in which the gift is made.

5.5 A fund or organisation can be granted tax deductible gift status in two ways. Firstly, a fund or organisation may qualify under one of the general categories listed in section 78 such as a public benevolent institution or a public hospital. Secondly, a fund or organisation may be specifically listed in section 78 or in a register kept for the purposes of that section as having tax deductible gift status.

5.6 In some circumstances, deductibility for a gift to a fund or organisation may only be available if made during a period specified in the law.

Explanation of the amendments

5.7 Gifts of $2 or more made to the Ararat War Memorial Restoration Trust Fund will be eligible for tax deductions under item 5.2.4 of table 5 in subsection 78(4). However, under the same item, the tax deductibility of gifts made to the Fund under item 5.2.4 will be limited to those gifts that are made after 3 April 1994 and before 4 April 1996. [Item 52]

5.8 Gifts of $2 or more made to the Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust will be eligible for tax deductions under item 5.2.6 of table 5 in subsection 78(4). However, under the same item, the tax deductibility of gifts made to the Trust under item 5.2.6 will be limited to those gifts that are made after 23 April 1994 and before 25 April 1996. [Item 52]

5.9 Gifts of $2 or more made to The Brisbane RAAF Memorial Fund will be eligible for tax deductions under item 5.2.5 of table 5 in subsection 78(4). However, under the same item, the tax deductibility of gifts made to the Fund under item 5.2.5 will be limited to those gifts that are made after 16 June 1994 and before 17 June 1996. [Item 52]

5.10 Gifts of $2 or more made to the Constitutional Centenary Foundation Incorporated will be eligible for tax deductions under item 2.2.15 of table 2 in subsection 78(4). However, under the same item, the tax deductibility of gifts made to the Foundation under item 2.2.15 will be limited to those gifts that are made after 27 June 1994. [Item 51]

5.11 Gifts of $2 or more made to the Australian and New Zealand College of Anaesthetists will be eligible for tax deductions under item 1.2.13 of table 1 in subsection 78(4). However, under the same item, the tax deductibility of gifts made to the College under item 1.2.13 will be limited to those gifts that are made after 26 October 1994. [Item 50]