School and College Building Funds may attract the attention of the ATO’s compliance program this year. The ATO develops and implements its compliance program annually, which identifies key areas for its compliance activities for the financial year. The compliance program targets areas
The ACNC Commissioner has just released the ACNC’s Interpretation Statement on Public Benevolent Institutions. The Interpretation Statement provides guidance on the ACNC’s interpretation of the law pertaining to Public Benevolent Institutions (PBI) and insight into how the ACNC and its staff will assess a charitable organisation’s entitlement for endorsement as a PBI. The Interpretation…
As advised in Issue 1: Governance, during the course of advising charities and not-for-profit (NFP) organisations over many years, we have noticed some common issues that are important to our clients. Over the next few months, we will continue to run a series of short summaries of those legal issues that every charity and…
The ACNC has recently released a register of charities that have not responded to communication from the regulator (i.e. no known address/contact details or correspondence has been returned to sender). Charities on this database risk losing their entitlements to charity tax concessions and have until 30 June 2014 to update their details and contact the ACNC. If these charities do not contact the ACNC, the ACNC will commence the process of revoking their registration as charities. If a charity’s registration with the ACNC is revoked it will not be entitled to charity tax concessions from the ATO.
Earlier today the Full Federal Court handed down its judgment regarding the Hunger Project Australia case and rejected the Commissioner of Taxation’s appeal (Commissioner of Taxation v Hunger Project Australia  FCAFC 69). The court has unanimously held that Hunger Project Australia (HPA) does not need to directly give aid…
Just weeks before the intended commencement of the “Better Targeting of NFP Tax Concessions” measure, the Acting Assistant Treasurer has issued a press release stating “the Government has considered alternatives to the previous government’s better targeting of not-for-profit tax concessions measure. We have concluded that they are not required at this time”. This news will be welcomed by many charities and not for profit organisations.
The Better Targeting of NFP Tax Concessions, commonly known as the unrelated business income tax (or UBIT), was introduced as part of the 2011-2012 budget and had been delayed for a number of years.
The Government has started to “clear the backlog of legislative matters and restore integrity to the Australian taxation system” by announcing the outcome of the review of 92 unlegislated tax programs.
Continue Reading Government Announces more Legislative Changes for Charities
On 31 January 2013 the Gillard Government announced that the Better Targeting of Not-For-Profit tax concessions legislation will now commence from 1 July 2014. Assistant Treasurer, David Bradbury MP said “this extension will enable further consultation and engagement with the NFP sector on this measure and ensure there is an opportunity for detailed stakeholder input to be provided.”
The purpose of the legislation is to ensure that tax concessions provided to NFP entities are targeted only at those activities that directly further the NFP’s altruistic purposes. Any activity pursued by a NFP entity that is deemed to be “unrelated” business will not be eligible for the tax concessions that the entity is registered for (including FBT, GST and DGR).
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.
Summary – The High Court handed down its decision in Commissioner of Taxation v Bargwanna on 29 March 2012 ruling that trust funds in a charitable trust must be applied for the purpose of the charitable trust, and not just “substantially” or “on the whole”.
On 29 March, the High Court handed down its decision in the long running case of Commissioner of Taxation v Bargwanna allowing the appeal by the Commissioner of Taxation.
Mr and Mrs Bargwanna were the trustees of the “Kalos Metron Charitable Trust”. Between 2003 and 2007, the trustees distributed a total of $293,914.55 to numerous charitable cases.