Changes to Public Ancillary Funds

The Public Ancillary Fund Guidelines 2011 (Guidelines) setting out the rules for the establishment and operation of a public ancillary fund (PuAF) are due to lapse on 1 April 2022.

The majority of the proposed changes to the Guidelines are minor and technical in nature. The only substantive change is that public ancillary funds can seek a merits review of a decision by the Commissioner of Taxation on applications for a lower minimum annual distribution rate (proposed changes).

Ordinarily PuAFs must distribute annually:

  • at least four per cent (minimum annual distribution rate) of the market value of the PuAF’s net assets if its expenses are met outside the fund; or
  • at least $8,800 (or the remainder of the fund if that is worth less than $8,800) during a financial year if any expenses of the fund in relation to that financial year are paid directly or indirectly from the PuAF’s assets or income.

A PuAF can apply for the Commissioner to reduce this minimum distribution rate at any time. The proposed change will allow a PuAF to seek a merits review of any decision by the Commissioner not to reduce the annual distribution rate following application by the PuAF.

These proposed changes are likely to also be reflected in the changes to the Private Ancillary Fund Guidelines 2019.

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