Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX ASSESSMENT AMENDMENT REGULATIONS 2003 (NO. 4) 2003 NO. 373

Section 909-1 of the Income Tax Assessment Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the new Regulations is to:

•       prescribe a religious institution as being exempt from income tax;

•       remove one prescribed private fund from the list of funds to which gifts or contributions are tax deductible;

•       give effect to the name change of a prescribed private fund to which gifts or contributions are tax deductible; and

•       list 44 funds as prescribed private funds to which gifts or contributions would be tax deductible.

The specific provisions relevant to the new Regulations and their purposes are outlined in Attachment A.

The Catholic Archdiocese of Rabaul (Papua New Guinea) has been prescribed for the purposes of paragraph 50-50(c) of the Act, to ensure that it will be exempt from income tax.

JB Were & Son Charitable Fund has been removed from the list of `prescribed private funds' in subsection 995-1(1) of the Act.

To give effect to a name change of a prescribed private fund - from Vittorio Romano 1 Foundation to V M Romano Foundation, the new Regulations list the fund under its new name and prescribe a period of effect for the fund listed under the old name under subsection 995-1(1) of the Act.

The new Regulations also list 44 funds for the purposes of the definition of `prescribed private fund' in subsection 995-1(1) of the Act. The funds are listed in Attachment B. Each of the funds listed would be a prescribed private fund on and from the date of effect specified in the new Regulations.

The new Regulations commence on gazettal. However:

•       the Catholic Archdiocese of Rabaul is prescribed with effect from 18 August 2003; and

•       the 44 private funds are prescribed from the dates of approval by the Government.

While these dates are earlier than the date of gazettal of the new Regulations, subsection 48(2) of the Acts Interpretation Act 1901 has not been contravened. Subsection 48(2) prohibits the retrospective operation of regulations that adversely affect the rights of, or impose liabilities upon, a person. The new Regulations would be beneficial to the institutions and funds concerned and to taxpayers making donations to them.

Details of the new Regulations are set out in Attachment B.

The Act specifies no conditions that need to be met before the power to make the new Regulations may be exercised.

The Minute recommends that Regulations be made in the form proposed.

Authority:       Section 909-1 of the Income Tax Assessment Act 1997.

ATTACHMENT A

This outlines the specific provisions relevant to the new Regulations and their purposes.

Religious Institutions

Section 50-5 of the Act lists various types of charitable, religious, scientific and educational entities that are exempt from income tax subject to the special conditions listed in section 50-50 of the Act.

•       Paragraph 50-50(c) provides that a charitable or religious institution is not exempt from income tax unless it is a prescribed institution that is located outside Australia and is exempt from income tax in the country in which it is resident.

Subsection 50-50(c) provides that an institution is a prescribed institution on and after the date mentioned in the item listed under that subsection.

Prescribed Private Funds

Subsection 995-1(1) defines a `prescribed private fund' as a fund that is prescribed by the regulations for the purposes of the definition, but does not include any fund that has been declared by the Treasurer, in writing, not to be a prescribed private fund.

A prescribed private fund is a fund listed in the table under subsection 995-1.02 on and from the date specified in that table.

Each fund is established and maintained for the purpose of providing money, property or benefits to a fund, authority or institution that is listed either by name or by type in a table of recipients for deductible gifts in Subdivision 30-B.

Item 2 in the table to section 30-15 provides that a gift made to a prescribed private fund is deductible where the fund is established and maintained under a will or instrument of trust solely for:

(a)       the purpose of providing money, property or benefits to a fund, authority or institution gifts to which are deductible under item 1 of the table and for any purposes set out in the item of the table in Subdivision 30-B that covers the fund, authority or institution; or

(b)       the establishment of such a fund, authority or institution.

ATTACHMENT B

The Proposed Income Tax Assessment Amendment Regulations 2003 (No. 4)

Details of the regulations are as follows:

Regulation 1:       Names the regulations.

Regulation 2:       Provides that the regulations commence on gazettal.

Regulation 3:        Provides that Schedule 1 amends the Income Tax Assessment Regulations 1997.

Schedule 1:       Amendments

Item 1 lists one new institution as a prescribed institution in regulation 50-50.01 for the purposes of paragraph 50-50(c). The institution and its date of effect is:

Item	Name of institution	Date of effect
9	Catholic Archdiocese of Rabaul (Papua New Guinea)	18 August 2003

Item 2 removes the prescribed private fund (JB Were & Son Charitable Fund) listed at item 22 of regulation 995-1.02. The fund was dissolved by the Trustees on 11 June 2003 and replaced by the JB Were Foundation, which was approved for prescription and subsequently prescribed as item 60 of regulation 995-1.02.

Item 3 amends the period of effect of the prescribed private fund listed at item 98 of regulation 995-1.02 to give effect to the fund's approved name change. The name Vittorio Romano 1 Foundation was formally amended on 18 July 2003 to V M Romano Foundation. The new name is reflected in item 133 of regulation 995-1.02.

Item 4 inserts the names and date, or period, of effect of funds prescribed for the definition of prescribed private fund in subsection 995-1(1) (items 99 to 139 inclusive) into regulation 995-1.02. The funds and the date, or period, of effect of their listing are:

Item	Name of fund	Date, or period, of effect
99	James N Kirby Foundation	7 May 2003
100	The Minimbah Foundation for Youth	7 May 2003 to 19 May 2003
101	The Peters Family Foundation	20 May 2003
102	A Celebration of Life Foundation	24 June 2003
103	Abey Foundation	24 June 2003
104	Five Talents Foundation	24 June 2003
105	Hillcrest Foundation	24 June 2003
106	Janina and Bill Amiet Foundation	24 June 2003
107	Josef Reisinger Foundation	24 June 2003
108	McLean Perpetual Children's Foundation	24 June 2003
109	N. J. Innes Charitable Foundation	24 June 2003
110	Peter Isaacson Foundation	24 June 2003
111	The Alfred and Jean Dickson Charitable Foundation	24 June 2003
112	The Bell Shakespeare Company Foundation	24 June 2003
113	The Clitheroe Foundation	24 June 2003
114	The George Lewin Foundation	24 June 2003
115	The Harvard Club of Australia	24 June 2003
116	The Himalayan Foundation of Australia Trust	24 June 2003
117	The Johanna Sewell Memorial Fund	24 June 2003
118	The Lidia Perin Foundation	24 June 2003
119	The Maccabi Victorian Sports Foundation	24 June 2003
120	The O'Neill Foundation	24 June 2003
121	The Orcadia Foundation	24 June 2003
122	The Peggy Charitable Foundation	24 June 2003
123	The Reym Fund	24 June 2003
124	The Werled Foundation	24 June 2003
125	The William and Georgena Bradshaw Foundation	24 June 2003
126	Thornhill Foundation	30 June 2003
127	Turanto Cultural Foundation	30 June 2003
128	Dalcorp Foundation	30 June 2003
129	John and Marie Hill World Scout Jamboree Trust Fund	30 June 2003
130	PricewaterhouseCoopers Foundation	30 June 2003
131	Schapper Family Foundation	30 June 2003
132	Selim Foundation	30 June 2003
133	V M Romano Foundation	18 July 2003
134	The Arcus Foundation	8 September 2003
135	Clayton Utz Foundation	23 October 2003
136	Dibben Family Charitable Trust	23 October 2003
137	The Fair Go Foundation	23 October 2003
138	The Joseph Ulrick and Win Schubert Diversity Foundation	23 October 2003
139	The Judith Jane Mason and Harold Stannett Williams Memorial Foundation	23 October 2003
140	The Phileo Foundation	23 October 2003
141	The Reed Charity Trust	23 October 2003
142	The Sid Myer Foundation	23 October 2003