Tax TimeSummary – Public Ancillary Funds should lodge their Public Ancillary Fund Returns.

For those operating a Public Ancillary Fund, you may have received a notice from the ATO requesting that a Public Ancillary Fund Return be completed and submitted for the year ending 30 June 2012.

The requirements relating to Public Ancillary Fund Returns are set out in the Public Ancillary Fund Guidelines 2011.

The Return will require Public Ancillary Funds to provide an estimate of the market value of its assets as at 30 June 2012.

The Guidelines also require a Public Ancillary Fund to make minimum distributions of:

  • at least 4% of the market value of the Fund’s net assets (as at the end of the previous financial year); or
  • $8,800.00, if the 4% is less than $8,800.00 and any expenses of the Fund in that financial year are paid from the Fund’s assets or income.

If distributions are not made properly and there is a shortfall of more than $1,000.00, the penalty for contravention is 30 penalty units (equivalent to $3,300.00 at the date of this post).  Further penalties may apply if the trustee of the Fund does not rectify the shortfall within 60 days of being requested to do so by the Commissioner.

Instructions for lodging Public Ancillary Fund Returns are available at the ATO website.  Care should be taken in preparing the Returns, as the information in the Returns will be used by the ATO to assess the Fund’s compliance with its obligations.  Unsatisfactory returns can lead to penalties and even the loss of deductible gift recipient or income tax exempt status.

The notices issued by the ATO for the 2011-12 financial year will generally have a lodgment due date of 28 February 2013, unless the Fund has been approved to lodge in accordance with a substitute accounting period.  If you are unable to lodge by the due date, you should contact the ATO to arrange for extra lodgement time.