On 2 March 2012, we reported that new laws had been introduced regarding the way public ancillary funds are structured, operated and wound up.

What is a Public Ancillary Fund?

A Public Ancillary Fund is a type of fund that is entitled to deductible gift recipient (DGR) status and provides a link between


The Future of the ACNC Remains Uncertain

On 16 June 2014 the Senate Committee delivered a divided report on the Australian Charities and Not-for-profit Commission (Repeal) (No 1) Bill 2014 (No 1 Bill).

No 1 Bill

Unsurprisingly, the Liberal Senators supported the abolition of the ACNC, however, the Labor and Greens Senators offered dissenting reports appealing for the ACNC to continue. The dissenting reports noted that the ACNC is preferable to returning to the previous regime of regulation by the ATO and ASIC.

The No 1 Bill was introduced into the House of Representatives on 19 March and now will return to the House of Representatives where it is likely to be passed by the lower house. Part 1 of the Bill contains the necessary provisions to repeal the ACNC and Part 2 provides for transitional arrangements, importantly, allowing for the Minister to specify a successor agency.

If passed, the Bill won’t come into operation until the Australian Charities and Not-for-Profits Commission (Repeal) Bill (No 2) (which has not yet been introduced) is successfully passed.


Continue Reading

Senior woman with caregiverSummary – Aged Care operators can place accommodation bonds in Development Funds.

When the Federal Government amended the prudential requirements for the investment of accommodation bonds in residential aged care facilities subject to the Aged Care Act in 2011, there was some doubt as to whether Catholic aged care operators could legitimately place accommodation bonds

AustraliaSummary – COAG has released the Regulatory Impact Assessment (RIA) of potential duplication of governance and reporting standards for charities.

On 25 January, COAG released a Regulatory Impact Assessment (RIA) concerning potential duplication of governance and reporting standards for charities.

COAG says the purpose of the RIA is to identify and quantify the extent of duplication between existing and proposed governance standards and reporting requirements on charities, with a view to assisting a final report to COAG to determine whether it is a problem that would warrant government action.


Continue Reading

ACNCSummary – The Australian Charities and Not-For-Profits Commission (ACNC) legislation has received royal assent and the ACNC has commenced operation.

Today the Governor General assented to the Australian Charities and Not-For-Profits Commission Act 2012 and the Australian Charities and Not-For-Profits Commission (Consequential and Transitional) Act 2012 (ACNC Acts).

Who is regulated by the legislation?

Although the title of the legislation extends to charities and Not-For-Profits, at this stage the ACNC Acts only cover “charities”, with the possibility for Not-For-Profits (who are not charities) being regulated under the ACNC Acts at a later stage.


Continue Reading

Tax PuzzleSummary – Submissions in response to the Not-For-Profit Sector Tax Concession Working Group’s discussion paper are currently being sought.

Submissions in response to the Not-for-profit Sector Tax Concession Working Group’s discussion paper, Fairer, simpler and more effective tax concessions for the not-for-profit sector released on Friday 2 November by the Assistant Treasurer, the Hon David Bradbury MP, and the Minister for Social Inclusion, the Hon Mark Butler MP, are currently being sought.

The Tax Concession Working Group was established in February 2012 by the then Assistant Treasurer, the Hon Mark Arbib, and the Minister for Social Inclusion, the Hon Mark Butler MP. Its goals are to consider ideas for better delivering the support currently provided through tax concessions to the Not‑For‑Profit sector, and it is intended to stimulate discussion, debate and feedback.


Continue Reading

Mouth GagSummary – The Commonwealth Labor Government intends to ban gag clauses in Commonwealth contracts with Not-For-Profits.            

On 19 September 2012 the Commonwealth Labor Government announced its intention to introduce legislation to ban so-called “gag” clauses in Commonwealth contracts with the Not-For-Profit sector.

The introduction of legislation to expressly ban the use of gag clauses which are considered to censor public debate is a move which will no doubt be welcomed by the Not-For-Profit sector as a critical part of the current reform process and the strengthening of the independence of the Not-For-Profit sector in Australia.


Continue Reading

Woman confused while filling out tax formSummary – California couple donated real estate worth USD18 million to a charity but their failure to complete the Internal Revenue Service (IRS) form correctly lead to their loss of the entire associated tax deductions.

California couple, Joseph and Shirley Mohamed, donated real estate worth USD18 million to a charity in 2003 and 2004 but their failure to follow instructions on how to document their donations when completing the Internal Revenue Service (IRS) form lead to a loss of the entire associated tax deductions.

Joseph and Shirley Mohamed set up a charitable remainder trust and donated six (6) properties to it. Under the tax relief allowed to these types of trusts, the couple would have been entitled to USD4.2 million in immediate charitable contribution deductions and another USD15 million in future years.


Continue Reading

person signing a willSummary – Care needs to be taken for gifts to charities and not-for-profit entities where an officeholder for the time is being appointed as executor.

Often Will makers when leaving a substantial gift to a charity or not-for-profit entity wish to appoint an office holder in the organization as executor of the Will.

Such an appointment was reviewed in the recent Supreme Court of South Australia case in the Estate of Chomiak [2012] SASC 27 (29 February 2012).  The deceased, Anna Chomiak, died in 2010, aged 93.  Her Will, which was prepared by a solicitor, nominated the “priest in charge for the time being of the Ukrainian Catholic Church at Wayville” as her sole executor.


Continue Reading