Proposed DGR category for community sheds

Legislation recently introduced in the Federal Parliament will establish a new deductible gift recipient general category for men’s and women’s sheds.

Schedule 3 of the Treasury Laws Amendment (2020 Measures No 2) Bill 2020 amends the Income Tax Assessment Act 1997 (Cth) and introduces a new deductible gift recipient (DGR) category applicable to public institutions that are registered charities with the Australian Charities and Not-for-profits Commission (ACNC) and satisfy the definition of a ‘community shed’.  To be classified as a community shed, a public institution must:

• have the dominant purposes of advancing mental health and preventing or relieving social isolation;
• principally advance these purposes by providing a physical location where individuals are provided with support, and can work on projects or undertake other activities in the company of others; and
• have membership that:
  • is open to members of the public; or
  • relates only to an individuals’s gender or Indigenous status or both.

If passed, the measure will apply to gifts and contributions made to community sheds with DGR endorsement on or after 1 July 2020.  The Federal Government anticipates that by allowing community sheds easier access to DGR status, this should assist them in attracting increased financial support and awareness.

Organisations interested in accessing the new community shed DGR category should first review their governing document to ensure it meets the criteria for both registration as a charity and endorsement as a DGR.

For further information on any of the issues raised in this alert, please contact us.

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