The Private Ancillary Fund and Public Ancillary Fund Amendment Guidelines 2016 were registered on Wed 4.5.2016. It amends the Private Ancillary Fund Guidelines 2009 and the Public Ancillary Fund Guidelines 2011 to, among other things:

  • update the Private Ancillary Fund Guidelines 2009 to reflect improvements incorporated in the later made Public Ancillary Fund Guidelines 2011;
  • introduce portability into the Private Ancillary Fund Guidelines 2009;
  • update both sets of Guidelines to reflect the introduction of the Australian Charities and Not-for-profits Commission (ACNC);
  • remove red tape by ensuring that material provided to the ACNC is not also requested separately by the ATO and allow smaller private funds to seek a review instead of an audit;
  • update the investment strategy rules to, among other things, ensure funds must consider both their status as a registered charity and conflicts of interest in preparing and maintaining a strategy; and
  • allow ancillary funds to provide loan guarantees over borrowings of deductible gift recipients.

The amending guidelines apply from Thursday 5.5.2016.

Sections 426-103 and 426-110 in Schedule 1 to the Taxation Administration Act 1953 (the Act) provide that the Minister must, by legislative instrument, formulate guidelines setting out the rules the trustees of public and private ancillary funds (respectively) their if the funds are to be, or are to remain, endorsed as *deductible gift recipients.

[Federal Register of Legislation: – 2009 Private Fund Guidelines; 2011 Public Fund Guidelines; 2016 Instrument & 2016 Explanatory Statement] [LTN 85, 5/5/16]

Subdivision 426-D – Public and private ancillary funds

426-100 – What this subdivision is about

This Subdivision deals with types of philanthropic trust funds known as public ancillary funds and private ancillary funds .

The Minister may make guidelines determining when ancillary funds are entitled to be endorsed as deductible gift recipients.

This Subdivision also provides for:

  • (a) penalties for trustees who fail to comply with the public ancillary fund guidelines or private ancillary fund guidelines (whichever are applicable), and the liability of directors of trustees to pay those penalties in certain circumstances; and
  • (b) powers for the Commissioner to suspend or remove trustees who breach their obligations.