Media Release

K3204 13 April 1999

Universities will be beneficiaries of the Government’s recently announced tax changes to encourage donations, the Minister for Education, Training and Youth Affairs, Dr David Kemp, announced today.

Dr Kemp said he expected the range of tax incentives announced by the Prime Minister on 26 March 1999 will see more people donate land and property to eligible educational institutions, such as Australian universities.

"Gifts of property with a market value of more than $5,000 to approved organisations such as universities will now be tax deductible, regardless of when the property was acquired," said Dr Kemp.

Previously, property had to be owned for less than 12 months to qualify for tax deductibility. This was a major disincentive for anyone considering donating to a university.

"A capital gains tax exemption will also apply to gifts bequeathed from deceased estates, which is another positive step towards encouraging more private donations," said Dr Kemp.

Before the changes the estate was required to pay capital gains tax on the difference between the value of the property when acquired and its value when donated. Because these taxes on gifts such as real estate or shares reduced the value of the estate for other beneficiaries, potential donors were more reluctant to make these types of bequests.

University libraries, university art galleries, and university museums will also benefit from changes to the Cultural Gifts Program. Gifts of significant cultural items will now be exempt from capital gains tax without the application of a $5,000 threshold. In addition, donors will be able to apportion their deductions for the gifts over a period of up to five years.

"Taken together these measures will cut through the red tape that has discouraged individuals and business from donating to educational institutions," said Dr Kemp.

"These measures send a clear message that the Government is concerned to further encourage corporate and personal philanthropy in Australia and in particular to foster new partnerships between the universities and business and individuals in the Australian community."

Media contact: Samantha Herron 02 6277 7460 or 0412 639 754

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