The Commonwealth Government has responded to the Productivity Commission’s report into philanthropy, charities and giving
In a recent ‘mini-update’, our Firm considered the Productivity Commission’s recommendations arising from its final report into philanthropy, charities and giving. By way of media release dated 5 December 2024, the Commonwealth Government has now responded to these recommendations – and intends to:
- remove the requirement in the tax law that a donor must make a gift of at least $2, before the donor can claim a tax deduction on donating to a Deductible Gift Recipient;
- rename ‘ancillary funds’ as ‘giving funds’;
- engage in consultation on an increase to the minimum annual distribution rate for giving funds, to encourage faster distribution of assets from giving funds. The minimum annual distribution rate for public ancillary funds is currently 4% of the fund value, and the minimum annual distribution rate for private ancillary funds is currently 5% of the fund value; and
- in the interests of flexibility, let giving funds ‘smooth’ out their annual distributions over 3 years.