Minister for Revenue and the Assistant Treasurer
27 January 2006 - 3 December 2007
Tuesday 9 May, 2006
MEASURES TO ENHANCE PHILANTHROPY AND STREAMLINE DEDUCTIBLE GIFT RECIPIENT ARRANGEMENTS
The Australian Government will introduce a number of changes to enhance philanthropy by extending a tax deduction for the donation of small parcels of shares; and streamlining the compliance requirements of deductible gift recipients (DGRs), while reducing their compliance costs. The changes will:
- Provide more options for philanthropy by allowing taxpayers to claim a tax deduction for the donation of publicly listed shares acquired more than 12 months ago and valued at $5,000 or less to a deductible gift recipient. Taxpayers will still be subject to capital gains tax.
- Increase public confidence in specifically listed DGRs by extending the Commissioner of Taxation’s power to review DGRs specifically listed in the tax law to ensure their activities align with the purposes and activities that they were listed to undertake. These powers are consistent with the review powers vested in the Commissioner of Taxation for those DGRs endorsed under the general categories. The Government and the Parliament will retain the power to approve (or revoke) specifically listed DGRs.
- Lower the compliance costs for certain DGRs by removing the requirement to maintain separate gift funds for each DGR endorsement or listing and allowing entities to maintain one gift fund for all DGR supported activities and purposes.
All measures will take effect from the first income year after the date of Royal Assent of the enabling legislation.
Media Contact: Brad Emery (02) 6277 7360
Why is this important?
- The measures will:
– increase the options available for taxpayers to make tax-deductible donations to deductible gift recipients (DGRs) and allow DGRs to receive small parcels of shares;
– ensure that the activities of specifically listed DGRs are subject to review by the Commissioner of Taxation in the same way that endorsed DGRs are; and
– reduce administration and compliance costs for DGRs by minimising the number of gift funds that certain DGRs with multiple DGR endorsement or listings are required to maintain.
Who will benefit?
- Taxpayers will benefit from the increased options to donate to DGRs and DGRs will benefit from obtaining shares that they can either sell or retain and receive a dividend stream;
- Improved integrity measures surrounding specifically listed DGRs will enhance public confidence in donating to DGRs; and
- DGRs will benefit from lower compliance costs as a result of maintaining fewer gift funds.
What funding is the Government committing to the initiative?
- The cost to revenue of the initiatives is $10 million in 2007-08 and $11 million in both 2008-09 and 2009-10.
What have we done in the past?
- Taxpayers would need to sell their small parcels of shares and donate the proceeds to a DGR in order to receive a tax deduction. Taxpayers could only receive a deduction for shares donated to a DGR that were purchased during the 12 months before they were donated or where the shares are valued at more than $5,000.
- DGRs were required to maintain one gift fund for each fund, authority or institution they operated.
When will the initiatives conclude?
- This measure is on-going.