Think Nicholsons

Dec 07

Rule changes for Deductible Gift Recipients


Rule changes for Deductible Gift Recipients

On Tuesday, the Turnbull Government announced changes to the rules affecting deductible gift recipients.

Most of these organisations have been partially governed by the ACNC (Australian Charities and Not-for-profits Commission), partially by the ATO (Australian Taxation Office), and sometimes by other Government Departments as well.  The changes, which have just been announced, move some of the ATO and Departmental governance to the ACNC.

One of the notable changes is the plan to dispense with the ‘public fund’ requirement, which applies to many DGRs.  I have always considered the ‘public fund’ to be a token and unnecessary extra structure - mainly a historical artifact, which doesn’t reflect modern society - so I hope that this will have the practical effect of reducing complexity and duplication of effort for affected DGRs. This change will probably also reduce the need for many DGRs to continually identify people who can squeeze into the special categories of ‘responsible people’.  It has not been easy for many DGRs to find people in these special categories - for example, accountants and solicitors - who also have the time and are willing to be involved (for free) in running these public funds.

There are currently a few separate registers of specialised DGRs, operated by different government departments.  Those registers (including the Overseas Aid Gift Deduction Scheme) will be integrated with the ACNC charity register, and this *should* reduce reporting requirements for affected DGRs.

Extra funding for review and investigation has also been announced.  I hope that these changes are a further indication of Government confidence in the ACNC, which (in my opinion) performs its role as the regulator of charities with clarity and transparency.

You can read more about the changes in the press release by the responsible Minister, here: http://nichs.us/DGR_rule_change

Stephen Robertson

Partner
Stephen is a commercial lawyer with extensive experience in advising businesses in areas of acquisitions and divestments, commercial agreements, structuring, legal risk and revenue issues. He also advises on property law, with a focus on commercial and industrial property.