Prescribed Private Funds
Many wealthy individuals provide for significant bequests to charities in their will. On a person's death, cash or assets pass to the chosen charities but with no tax deduction.
A Prescribed Private Fund is a charitable foundation that can accept tax deductible donations. By establishing a PPF, wealthy individuals, families or corporations can access significant tax benefits. By transferring wealth into a PPF during a person's lifetime, rather than the assets passing on death, a number of opportunities exist to obtain significant tax benefits.
These benefits include the following:
- Donations to a PPF are deductible to the donor
- PPF's are exempt from tax, so the PPF pays no tax on its income or capital gains
- If the PPF invests in Australian shares, it will also receive a refund of all imputation credits on dividends it receives.
By adopting strategies which take advantage of these tax breaks, a significantly higher capital amount can be invested for the purpose of making future charitable donations.
This can be a very attractive proposition for a person or family seeking to establish a foundation which will distribute its income to registered charities for an extended period, or even in perpetuity.
Individuals considering large charitable donations are advised to act early. The longer the PPF is in existence before a person's death, the greater the tax benefits and therefore the greater the level of support to charities.
Jaquillard Minns have experience in advising clients on tax strategies, establishing and administering a PPF, as well as handling the ongoing compliance requirements.
If you would like to discuss any aspect of our PPF service in more detail, please speak to David Minns on 08 8221 6551.