Government Releases Draft PPF Legislation
28 May 2009 at 2:16 pm
The Assistant Federal Treasurer, Chris Bowen has released an exposure draft of legislation aimed at improving the integrity of Prescribed Private Funds (PPFs).
PPFs are a form of ancillary trust fund designed to encourage private philanthropy by providing private groups, such as businesses, families and individuals, with greater flexibility to start their own trust funds for philanthropic purposes. Donors receive a tax deduction for donations to their PPF, and most PPFs are also income tax exempt.
The exposure draft proposes that the Treasurer have the ability to make legally enforceable guidelines for PPFs, increases the Australian Taxation Office’s regulatory power over PPFs, and gives the Commissioner of Taxation full power over the administration (including the endorsement) of PPFs.
Bowen says as PPFs will no longer be prescribed in the relevant legal sense, the name of PPFs will change to ‘private ancillary funds’.
He says the new streamlined approval arrangements of private ancillary funds are consistent with other kinds of organisations that collect tax deductible donations.
The draft says for reasons of Constitutional authority, all new private ancillary funds must be controlled by a single corporate trustee.
Approximately 80 per cent of existing funds already meet this requirement, and the remainder will have until 1 July 2011 to comply. The changes are planned to have effect from 1 October 2009.
The Assistant Treasurer encourages interested parties to provide their comments on the exposure draft by 29 May 2009. The exposure draft is available at www.treasury.gov.au
A further round of consultation will occur with the release of an exposure draft of new guidelines later this month.
Address written submissions to:
Philanthropy and Exemptions Unit
Personal and Retirement Income Division
PARKES ACT 2600
For inquiries call Chris Leggett (02) 6263 3208