Changes to Minor Benefits Measure (2006)

Gina Anderson, Philanthropy Australia's CEO, reports: After a number of discussions with Mandy Hilson, Senior Manager, Business Engagement in the Community, FaCSIA, and her staff on the "Minor Benefits measure", I was delighted to see that the Federal Government, in consultation with the Prime Minister's Community Business Partnership, has announced changes to the "Minor Benefits measure".

Minister for Families, Community Services and Indigenous Affairs, Mal Brough and the Minister for Revenue and Assistant Treasurer, Peter Dutton MP, recently announced improvements to taxation deductibility provisions that affect fundraising charity dinners and events.

The Minor Benefits Measure seeks to permit a tax deduction for a payment to a charity where a benefit is received by the taxpayer provided that the value of the benefit received does not exceed the designated percentage of that payment. Deductions allowed under this measure are separate to deductions currently allowed for gifts.

The changes will reduce the minimum contribution threshold to $150 (previously $250),
which will allow a greater number of charities to use the measure for fundraising. The value of the minor benefit allowed will be increased to 20 per cent of the gift - or ticket price - but not exceeding a value of $150 (previously 10% not exceeding $100).

The changes to the Minor Benefits Measure will apply from 1 January 2007.

An example of the operation of the measure is where a ticket to a fundraising dinner cost $200. The market value of the benefit (say the value of the plate) could be up to $40 and participants would be entitled to a tax deduction of the balance of approximately $160.
You can view the text of the press release of this announcement on the ATO web site at - http://ato.gov.au/nonprofit/content.asp?doc=/content/81719.htm

Information regarding the changes to Deductions for contributions with Associated Minor Benefits will be incorporated on the Partnership and Australian Taxation Office websites (www.partnerships.gov.au and www.ato.gov.au) after 1 January 2007

Taxation Laws Amendment Act no. 2 (2000)

Taxation Laws Amendment Bill (No. 8) 1999 passed into law as the Taxation Laws Amendment Act (No. 2) on 9 May 2000 and received Royal Assent on 31 May 2000.

Relevant provisions include:

• An income tax deduction for non-testamentary donations of property with a market value of more than $5000, regardless of when the property was purchased or acquired by the donor. Prior to these changes if a gift of property was made by a donor and had been acquired more than 12 months before, no income tax deduction was available. Even though such a deduction would have been available for a cash or recently acquired property donation.
• A capital gains tax exemption for testamentary gifts of property donated to organisations, bodies or funds eligible to receive tax deductible donations. Previously such a donation would have been denied an income tax exemption and may have paid Capital Gains Tax.
• Capital Gains Tax exemption for gifts of property made under the Cultural Gifts Program unless the property is acquired for less than market value by the donor.
• A new category of 'private funds' (Prescribed Private Funds) to be included in the gift provisions. These new funds will not be required to seek donations from the public at large but will still be required to meet all of the other 'public fund' conditions to be approved. The new funds will have tax deductible status.
• Greater incentives for certain gifts made as cultural gifts, heritage gifts or environmental gifts, allowing taxation deductions for all gifts accepted by the programs to be apportioned over a period of up to five year. Prior to this deduction could only be claimed in the financial year the gift was made.
  

Excess Imputation Credits (2000)

From 1 July 2000, the Business Tax System (Misc) Bill 1999 allows the refund of excess imputation credits to registered charities and tax-deductible organisations. As a result of this change, there will be additional millions of dollars available for charitable distribution annually.

GST Exemption (2000)

Philanthropy Australia's private ruling relating to GST has been withdrawn, 2 April 2007, as a result of the introduction of GSTR 2006/9. Philanthropy Australia is currently working on providing information for our members, and advice will be forthcoming. Please call us with any queries.

Environmental Tax Concessions (2001)

The Prime Minister announced on 20 August 2001 a further taxation measure to encourage philanthropy; the allowing of income tax deductions to land holders who enter into perpetual conservation covenants for no consideration with deductable gift recipients. This measure from the CSIRO/Ian Potter Foundation Report, Sustaining the Land, was recommended by the Community Business Partnership's taxation working group.

Click here for the Prime Minister's announcement.