Macrossans Lawyers Brisbane law firm

Establishing a Prescribed Private Fund  (PPF) is an excellent way for a person, family or company to establish and maintain an interest in their chosen charities over an extended period.

A PPF also provides the added benefit of reducing tax. Donations to a PPF will usually be fully tax deductible if its only purpose is to distribute donations to charities and other deductible gift recipients.

It is also possible to obtain the consent of the Australian Tax Office to accumulate funds in the Fund until it achieves a reasonable size. Usually, while the Fund will have a reasonable discretion to invest the capital of the Fund, it must be seen to be for the benefit of the Fund and the beneficiaries of the Fund, that is, other charities and deductible gift recipients.

To set up a PPF, the following requirements must be met under the Income Tax Assessment Act 1997 (ITAA):

1. The fund must be established and maintained under a Will or instrument of Trust solely for the benefit of deductible gift recipients
2. Various measures must be complied with including auditing requirements; a prohibition on any benefit being made to the trustee, donor, founder or any ‘associate’; and how funds may be accumulated
3. The fund must have an Australian Business Number to gain exemption from income tax and agree to be placed on the Australian Business Register indicating it is a deductible gift recipient
4. A trustee company will need to be put in place, which must include at least one ‘responsible person’ who has a general responsibility to the community, such as a member of a profession which has a code of ethics or rules of conduct. This person must not be associated with the founder, other than in a professional capacity, or cannot have donated more than $10,000 to the Fund.

Further information:
Paul de Silva
T (07) 3292 9720
E This Email address is being protected from spam bots, you need JavaScript enabled to view it