The following is a short extract from an email of tax advice from Webb Martin Consulting, taxation agents and advisors, to Geoff Williams, on 14 May 2009. Copy is available from any Committee member.
Endorsement as a deductible gift recipient (DGR)
The Tax Office has endorsed the Trust Account of the Association as a DGR, on the basis that the Trust Account is a public fund on the Register of Cultural Organisations (the Register).
Will the changes to the membership of the Association affect its deductible gift recipient status?
As the Association has been endorsed as a DGR for the operation of the Trust Account as a public fund on the Register, it is obliged to self-assess its entitlement to DGR status. In our view, both the past and proposed changes to the constitution of the Association in relation to the membership clause should not affect any of the criteria for eligibility for DGR status (of the fund) as described above. Here, we have assumed that the principal purpose of the Association remains as the promotion of a visual art/craft (i.e. the promotion of sculpture).
Is the Association validly entitled to endorsement as a DGR?
The principal purpose of the Association is therefore critical to the DGR status of the Trust Account. In the event that the activities of the Association are such that its principal purpose is the advancement of members interests (and not the promotion or advancement of sculpture), then the Association would not meet the requirements for listing on the Register. In this case, the Trust Account would also not be operated for the principle purpose of the promotion of sculpture. This would mean that the Associations Trust Account would not be entitled to DGR status.
The Association must also meet the conditions for maintaining a gift fund. For example, a separate bank account is required for a public fund.
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