PAFs & Philanthropy

The Australlian Taxation Office has released new information products to assist organisations seeking deductible gift recipient (DGR) status under the new category for private ancillary funds (PAFs), effective from 1 October 2009. The website includes information on the transitional arrangements for existing prescribed private funds (PPFs), which became PAFs on 1 October 2009.

The new information includes a private ancillary funds website that provides information about the new category, the requirements for endorsement and the transitional arrangements for PPFs. It also provides links to the other products for PAFs, including:

• the PAF model deed
• updated instructions for endorsement as a deductible gift recipient
• the PAF schedule
• the agreement to comply with the PAF guidelines
• the revocation of agreement to comply with the PAF guidelines, and
• the PAF guidelines, which are located on the Federal Register of Legislative Instruments

The Tax Office is in the process of developing a Frequently Asked Questions webpage to answer questions about PAFs. If your questions are not answered in the above products, the ATO encourages you to email them your questions for possible inclusion in the FAQ. Email your question by 6 November 2009 to npc-publications@ato.gov.au, putting ‘Private ancillary funds - frequently asked questions’ in the subject line.

The final Guidelines for Private Ancillary Funds have been released. The Guidelines can be downloaded from: http://www.comlaw.gov.au/comlaw/Legislation/LegislativeInstrument1.nsf/0/46B098606729DA20CA25763C00058CD6?OpenDocument&VIEWCAT=item&COUNT=999&START=1

There is also an explanatory statement which provides some explanation and clarification on the Guidelines, which we recommend that Members and interested parties read. It can be accessed by clicking on the tab reading “ES/SuppMaterial” at the above link.

The final Guidelines contain several differences to the draft version, including abolition of the requirement for PAFs to prepare and maintain a distribution strategy. Both the Guidelines and the Explanatory Statement include much of the clarification which Philanthropy Australia had requested in its response to the Draft Guidelines.

The new regulatory regime governing Private Ancillary Funds (PAFs) commences today, 1 October 2009. The ATO has advised Philanthropy Australia that they will be contacting existing PPFs to advise them of the changes and of the steps they will need to take to transition from a PPF to a PAF. They expect the transition period to take some months and are developing materials to help existing PPFs with the transition process.