Just weeks before the intended commencement of the "Better
Targeting of NFP Tax Concessions" measure, the Acting
Assistant Treasurer has issued a
press release stating "the Government has considered
alternatives to the previous government's better targeting of
not-for-profit tax concessions measure. We have concluded that they
are not required at this time". This news will be welcomed by
many charities and not for profit organisations.
The Better Targeting of NFP Tax Concessions, commonly known as
the unrelated business income tax (or UBIT), was introduced as part
of the 2011-2012 budget and had been delayed for a number of
The purpose of the legislation was to ensure that tax
concessions provided to NFP entities were targeted only at those
activities that directly further the NFP's altruistic purposes.
Any activity pursued by a NFP entity that was deemed to be
"unrelated" business would not be eligible for the tax
concessions that the entity was registered for (including FBT, GST
and DGR). Importantly, any surplus from "unrelated"
business activities that is not applied for the altruistic purposes
of the entity would be subject to income tax.
For more information on UBIT please take a look at our earlier
As part of the above mentioned
press release the Government has stated "The Government
has not made a decision on a targeted anti-avoidance provision to
address certain conduit arrangements and is still seeking advice on
this matter". No further information is provided and it will
be interesting to see how wide ranging any proposed arrangements
Should you have any questions in relation to UBIT or any other
matters please do not hesitate to contact Bill d'Apice or Anna
Lewis of our office.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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