15 August 2011

Mr Chris Leggett
Manager 
Philanthropy and Exemptions Unit
Personal and Retirement Income Division
The Treasury
Langton Crecsent
PARKES  ACT  2600

Dear Chris

‘In Australia’ Requirements

The Trustee Corporations Association is the peak representative body for the trustee corporations industry in Australia.  
It represents 16 organisations, comprising all 8 regional Public Trustees and the great majority of the 11 private licensed trustee company groups.
Trustee corporations have been providing professional wealth management services for over 120 years.  
Traditional services include: 
o	estate planning 
o	preparing wills
o	powers of attorney 
o	acting as executor of deceased estates 
o	acting as trustee for various types of trusts
o	managing the financial affairs of people lacking the capacity to do so themselves 

Our members currently act as trustees for about 2,000 charitable trusts with assets of over $3bn under management and each year distribute many millions of dollars in grants to worthy charitable causes.
We appreciate having the opportunity to comment on the exposure draft of the Tax Laws Amendment (2011 Miscellaneous Measures) Bill (No.1) 2011 in relation to the ‘In Australia’ special conditions for tax concession entities.
Comments
We support the general thrust of the Bill which aims to provide additional measures to address possible abuse of NFP entities for the purposes of money laundering and terrorist financing, and to ensure the proper operation of those entities.
However, we note that section 50-50 (2) (c) of the Bill states that an exempt entity must not “donate” money to any other entity, unless the other entity is an exempt entity.
It is unclear whether this section is meant to apply to charitable trusts which distribute their income, either through fixed income distributions or discretionary grants in accordance with their deeds, to individuals (for example: promising artists) or non-charitable entities (for example: housing projects in indigenous communities) which are not exempt entities.
It would be extremely unfortunate if the proposed amendments prevented charitable trusts from continuing to support such purposes.
Further, some distributions from the charitable trusts managed by our members go to overseas recipients such as orphanages. 
We similarly would be disappointed if the proposed amendments impeded those initiatives by impacting on the exempt status of those trusts.
Yours sincerely

Ross Ellis
Executive Director