By Jon Cheung and Arthur Koumoukelis of Gadens Lawyers,
On 19 November 2010, the Commonwealth Assistant Treasurer
announced proposed changes to the regulatory framework for public
ancillary funds, releasing a discussion paper and inviting
submissions from interested parties for public consultation.
In May 2010 the Rudd Government
foreshadowed changes to the regulatory framework to improve the
integrity of public ancillary funds and boost confidence in the
Does this affect my organisation?
A public ancillary fund is established to:
act as an intermediary between donors and organisations that
can receive tax deductible donations (deductible gift recipients or
to create another deductible gift recipient.
The proposed changes outlined in the discussion paper follow
four key principles identified by the Government. The questions
raised for public consultation under the four key principles are
1. The funds are philanthropic
What is an appropriate minimum distribution rate for a public
ancillary fund and why?
Are there any issues that the Government needs to consider in
implementing the requirement to ensure public ancillary funds
regularly value their assets at market rates?
Are the valuation rules that apply to private ancillary funds
also appropriate for public ancillary funds? If not, why not?
Are there any issues with requiring public ancillary funds to
lodge a return?
Are there any issues with imposing greater public disclosure
requirements on public ancillary funds? What information should
remain confidential and what information should be disclosed and
2. The funds are trusts that abide by all relevant laws and
obligations, and are open, transparent and accountable
Is the administrative penalty regime (including magnitude of
penalties) that applies to private ancillary funds suitable for
public ancillary funds?
Are there any difficulties in requiring public ancillary funds
to have a corporate trustee?
Are the rules for suspension or removal of trustees of private
ancillary funds suitable for public ancillary funds?
What 'fit and proper' person requirements should be
imposed on trustees of public ancillary funds?
What transitional arrangements are required for existing public
ancillary funds to conform to the new arrangements?
3. The funds are public
(a) Should the term 'public fund' be codified in the
guidelines in accordance with the principles set out in ATO
Taxation Ruling TR 95/27 (Income tax: public funds)
4. The funds are ancillary funds
(a) Can the investment and risk minimisation rules that apply to
private ancillary funds be suitably applied to public ancillary
The proposed changes will have a particular impact on charitable
and other not-for-profit organisations with an existing public
fund, or that are seeking to establish a public fund.
The proposed changes are likely to provide donors and the public
with greater confidence in the integrity of public funds. There is
also likely to be a greater burden on not-for-profit and charitable
organisations to understand and operate a public fund under the
proposed regulatory framework.
The closing date for submissions is 17 December 2010.
Gadens Lawyers can advise you on how the proposed
changes may impact your organisation and assist you to prepare a
submission to the Government.
We can also advise you on the establishment, restructure or
governance of your public ancillary fund.
An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
Lenders in New South Wales breathed a sigh of relief earlier this month when the Supreme Court ruled in Bank of Western Australia Ltd v. Primanzon  NSWSC 862 that two part-time commercial property investors could not claim relief under the Contracts Review Act 1980 (NSW) because the loans advanced to them were entered into in the course of a trade, business or profession carried on by them.
A key aspect of an innovation culture is keeping it active at all levels of management, from teams to board meetings.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).