The Federal Government has announced significant reforms to the regulation of Private Ancillary Funds (PAFs) and Public Ancillary Funds (PuAFs) as part of its broader objective to increase philanthropic giving in Australia.

These changes flow from recommendations by the Productivity Commission and recent Treasury consultations and are expected to have a significant impact on how ancillary funds operate and plan their distributions. This also builds on the broader regulatory focus outlined in our previous article, which discusses similar issues around the interpretation of benefits and compliance expectations for ancillary funds.

Renaming of ancillary funds to ‘Giving Funds’

Private and Public Ancillary Funds will be renamed ‘Giving Funds’.

The government has indicated that this change is intended to more clearly reflect the core purpose of these structures, which is to distribute funds to eligible charities rather than to accumulate capital over time.

Minimum annual distribution rates

The government has announced it will align the minimum annual distribution rates for Private and Public Ancillary Funds to 6%.

At present:

• Private Ancillary Funds are required to distribute 5% of net assets each year.
• Public Ancillary Funds are required to distribute 4% of net assets each year.

Distribution smoothing

To offset the impact of higher annual distribution requirements, the government has announced that Giving Funds will be allowed to smooth distributions over a three-year period.

This means funds will be able to average their minimum distribution obligation across multiple years, rather than meeting the minimum on an annual basis. The measure is intended to:

• support more strategic grant making
• reduce the risk of forced asset sales in years of weaker investment performance.

Timing of change and transitional rules

The new rate will apply from the first financial year following amendments to the Giving Fund guidelines, and existing Giving Funds will not need to meet the new distribution rate for two years.

How SW can help

For trustees of Giving Funds, the changes create both compliance obligations and strategic opportunities. SW can help with:

• modelling the cash flow and investment impact of a 6 percent distribution rate across different market return scenarios
• reviewing trust deeds and governing documents to ensure they permit higher distributions and three-year averaging
• designing grant strategies that use averaging effectively while still meeting annual compliance requirements
• aligning distribution timing with investment performance and liquidity needs
• support large capital distributions
• documenting trustee decisions to support ACNC and ATO expectations.

Contributor

Heather Dyke

The post Government announces changes to Private and Public Ancillary Funds (Giving Funds) appeared first on SW Accountants & Advisors.

The draft provides the first comprehensive guidance on when private and public ancillary funds ‘provide a benefit’ under the Taxation Administration (Private Ancillary Fund) Guidelines 2019 and the Taxation Administration (Public Ancillary Fund) Guidelines 2022 (collectively, the Guidelines). 

SW provided feedback on the Treasury’s Giving fund reforms in August. Based on our discussions we found that trustees were concerned that the change is inconsistent with their Funds’ objective of providing long-term charitable support.

This draft determination represents a significant development in the regulation of ancillary funds, clarifying key interpretive questions that have implications for fund trustees, donors, and related entities. The determination addresses two critical provisions, those being:  

Background to ancillary funds  

Ancillary funds benefit from favourable tax treatment, with income generally exempt from tax and donations to them deductible. However, these concessions could be misused for private benefit. To safeguard the philanthropic purpose, ancillary funds are governed by strict Guidelines that set out general principles requiring ancillary funds to be both philanthropic in character and vehicles for philanthropy. 

The Guidelines impose two key obligations relevant to TD 2025/D3: 

Private Ancillary Funds have been in focus recently with the Treasury recently releasing a consultation paper on Giving Fund reforms.  

Overview of TD 2025/D3 

The determination addresses two critical questions: 

What is a ‘benefit’? 

The Guidelines do not define ‘benefit’. TD 2025/D3 clarifies that a benefit includes an advantage, a profit, or a gain, and is not limited to the payment of money or transfer of property. 

The draft determination outlines that a benefit can have the following key characteristics: 

Provision of benefits under section 15(4) of the Guidelines 

As outlined in the Guidelines, a distribution is the provision of money, property or benefits. The draft determination provides the following requirements for a benefit to qualify as a distribution under section 15(4): 

Non-binding promises of future payment 

The new determination clarifies that a promise of future payment by an ancillary fund to a DGR is not a ‘distribution’ under section 15(4) of the Guidelines. A non-binding promise of a future payment creates, at most, a mere expectancy or possibility which has no legal existence and therefore does not amount to a benefit. 

The new determination sets out that a promise of a future payment can only be binding if, when the promise is made, the trustee exercises a power that the trust deed permits to be used at that time in relation to the relevant income or capital of the fund. 

Provision of benefits under section 22(3) of the Guidelines 

Section 22(3) of the Guidelines provides an integrity provision which states that the trustee of an ancillary must ensure that the fund does not provide any benefit (except where permitted by section 23) directly or indirectly to a related entity. In this context, a related entity will be any of the following: 

In the context of section 22(3), benefit is not limited to financial gain, but encompasses things such as: 

It is further outlined that ancillary funds may provide benefits by omission. This may occur by failing or refusing to take actions, such as not requiring related entities to fulfill financial obligations for example. 

The phrase ‘directly or indirectly’ broadens the meaning of how benefits may be provided under subsection 22(3). It captures not only the ancillary fund’s direct actions but also any indirect arrangements or omissions that result in a benefit to a related entity, even if that entity is not directly involved in the transaction. The draft determination focuses on the overall effect of the fund’s conduct, ensuring that all contributing factors are considered. 

How SW can help 

SW can assist ancillary funds in ensuring that any benefits they wish to provide fall within the scope of the Guidelines as clarified in TD 2025/D3. We can review proposed distributions and related party arrangements to confirm they meet the ATO’s definition of a ‘benefit’ and do not trigger penalties under subsection 22(3). 

Taxpayers can still make comments on the draft guidelines until 30 January 2026.

For assistance in establishing or managing a Fund please contact our private client specialists, Heather Dyke or Matthew Oakey.  

Contributors

Blake Trad

Heather Dyke

The post ATO Draft Determination TD 2025/D3: New guidance on when ancillary funds ‘provide a benefit’  appeared first on SW Accountants & Advisors.

He specialises in the Funds Management, Agribusiness, and Retail sectors, supporting clients to navigate regulatory change, investor expectations, and cross-border complexities. Luke has developed particular expertise in advising on agricultural investment structures, helping funds and investors optimise returns through effective tax strategies that address income tax, withholding tax, MIT/AMIT eligibility, and ESG-linked opportunities such as carbon credits.

Before becoming a Partner, Luke worked in the Business and Private Client Advisory division where he established a strong reputation as a trusted adviser to private family groups and mid-market businesses, leading numerous business consulting projects and tax engagements.

As Manager of the Financial Services Industry Group, Luke regularly presents to market participants and industry bodies. He leads our fund tax and accounting webinars, has delivered training to the Property Council of Australia, and spoken at Property Funds Association events.

Luke is also committed to community and professional development. He is an active member of the firm’s Community Opportunities Together Committee and has mentored many team members to manager roles across professional services and industry.

Luke’s experience includes: 

• Advising funds on structuring agricultural and real asset investments to achieve optimal tax outcomes for domestic and offshore investors
• Providing strategic tax advice on M&A transactions across agribusiness, funds management, and retail
• Advising on structuring for Australian and multinational groups, including inbound investment
• Delivering ongoing tax compliance services for listed and unlisted groups.

The post Luke Fernandes, Partner appeared first on SW Accountants & Advisors.

The 2024 Emerging Property Fund Managers series has now concluded. To register your interest for the next series, which will be announced in the coming months, please email marketing@sw-au.com.

For the seventh year, we delivered an interactive 5-part seminar series to aspiring and emerging leaders in the Property Fund Management sector, with direct access to leading industry experts and their experience, strategic industry insights and pitfalls, and key issues ranging from structuring, debt and equity through to legal and compliance.

Facilitated by our property funds specialists, featuring content developed alongside industry, each session featured practical working considerations and discussions with market leaders.

Series speakers

Industry speakers

• Howard Brenchley | APN Property Group
• David Omond | KM Property Funds
• Nick Klein | CyberCX
• Melissa Kingham | Haben Property Fund
• Chris Langford | Newmark Capital
• Emma Donaghue | Hall & Wilcox
• Georgia Liu | Commonwealth Bank of Australia

SW speakers

Simon Tucker
Director, Tax 
SW

Rami Eltchelebi
Partner, Assurance and Advisory Services
SW 

Stephen O’Flynn
Director, Tax
SW

Abi Chellapen
Director, Tax 
SW

Sejla Kadric
Director, Business & Private Client Advisory 
SW

Danny Armstrong
Director, Banking & International Business
SW

Contact us

If you have any queries or would like more information, please contact the Marketing team via marketing@sw-au.com.

The post Emerging Property Fund Managers series 2024 appeared first on SW Accountants & Advisors.

Over eight months, SW worked closely with the Blackwattle team and Hamilton Locke lawyers to provide a seamless and efficient establishment of the investment firm, ensuring that all aspects of the Group’s goals were addressed and that Blackwattle had a solid foundation to build upon. 

SW involvement was key in assisting Blackwattle’s implementation of their long term incentive plan which underpinned Blackwattle’s key strategy of striving to be ‘”the most aligned fund manager in the country”. SW also facilitated the establishment of a corporate structure appropriate to the long term success of the funds management business.  

Facilitating the Blackwattle difference 

One of the key areas of focus was providing expert tax advice in relation to the start-up employee share scheme (ESS) provisions. A significant strategy of the fund is the requirement that portfolio managers invest in the funds they are managing, so the employee long term incentive plans were a crucial aspect.  

“We invest alongside our investors and clients, with personal capital committed and corporate profits reinvested into our portfolios, there is no personal trading,” said Blackwattle Managing Director and CIO Michael Skinner. “Having significant ‘skin in the game’ means we are 100 per cent aligned to the common interest of our clients, which is uncommon in the Australian funds management industry,” he added. 

SW advised on and reviewed employment agreements, employee share option plan rules, independent director agreements, and shareholder agreements to ensure compliance and optimal outcomes for Blackwattle and its investors. 

Leveraging his extensive experience and expertise in the funds management industry, SW Director Simon Tucker led the advisory for Blackwattle, working with the SW team to bring valuable insights and strategic advice to Blackwattle. 

“We are thrilled to have been a part of Blackwattle Investment Partners’ journey from the very beginning,” Tucker said. “Our collaboration enabled us to provide tailored solutions and guidance, supporting the firm’s growth and ensuring a solid foundation for success. We are grateful for the trust placed in us and look forward to continuing our partnership.” 

The partnership between the companies was initiated by Blackwattle’s legal team Hamilton Locke, who recommended SW based on their excellent reputation in the funds management industry. The successful completion of this engagement further strengthens SW’s position as a trusted advisor in the financial sector. 

Blackwattle launched with capital backing for more than five years, distribution of four investment portfolios from day one, a five person board as well as third party governance with independent chair-headed ESG and Investment Councils.  

Key professionals from SW Accountants & Advisors included Justin Batticciotto, Tom Warrington and Dennis Low. 

For more information about SW Accountants & Advisors and their range of services, please visit sw.com.au or contact Amanda Lee.

About SW Accountants & Advisors: 

SW Accountants & Advisors is a leading financial advisory firm providing a comprehensive range of accounting and advisory services to clients across various industries. With a team of seasoned professionals and a client-centric approach, SW delivers tailored solutions and strategic advice to help businesses achieve their goals. 

Reach out to Simon Tucker or learn more about our startup advisory services here.

Media contact

Amanda Lee
Head of Business Development & Marketing

E alee@sw-au.com
P +61 3 8635 1853

The post Media release | SW assists Blackwattle establish new generation fund manager appeared first on SW Accountants & Advisors.

The CCIV regime provides a new type of corporate flow-through entity, which is an incorporated company but which, through a set of deeming principles, is effectively treated as a trust for all tax law purposes.

The purpose of the regime is to increase the competitiveness of Australia’s managed funds industry by creating a flow through corporatised entity which is more widely recognised internationally and draws on characteristics of similar regimes currently utilised in Singapore, UK, Hong Kong and elsewhere.  

A further objective of the CCIV tax framework is to align the tax treatment of CCIVs and their members with the existing tax treatment of general trusts and attribution managed investment trusts (AMITs). Where a CCIV sub-fund trust:

• meets the AMIT eligibility criteria, it will be taxed as an AMIT under the attribution flow-through tax regime
• fails to meet the AMIT eligibility criteria, the CCIV sub-fund trust will be taxed in accordance with general trust provisions, which is consistent with the current outcomes for AMITs 

Characteristics of a CCIV

A CCIV is a legal form company limited by shares, the income of which is distributed by way of legal form dividends. The company must be registered with ASIC under the new chapter 8B of the Corporations Act 2001.

The company has a sole corporate director which must be a public company that holds an Australian Financial Services License (AFSL). The company must have at least one sub-fund which has at least one member and it can either be a wholesale or retail sub-fund.  

The CCIV will effectively operate as an umbrella vehicle of separate sub funds, with each sub fund potentially providing a different investment offering, and each sub-fund potentially having different members. The sub-funds are not separate legal entities but operate as cells within the CCIV.

A CCIV is deemed to be the trustee of each sub-fund, each of which is a separate entity for income tax purposes. The sub-funds, subject to meeting relevant requirements, may be treated as AMITs.

The constitution of the CCIV will be its primary governing document and will contain different provisions depending on whether the CCIV is a retail or wholesale fund.

While a CCIV is not a MIS, there are separate requirements which build in similar protections for CCIV investors, similar to those available to MIS entities.

Advantages of a CCIV

International recognition

The CCIV regime draws on characteristics of similar regimes which operate in other jurisdictions. Given many international investors are not familiar with the unit trust structure widely adopted in Australia in relation to Funds, the CCIV increases international competitiveness in the funds management space by creating an entity which is more widely recognised internationally and may therefore be more attractive to international investors.

Segregation of assets and liabilities

Whilst each sub-fund is not a separate legal entity, the assets and liabilities are segregated from each other. The assets of each sub-fund can legally only be applied for purposes relating to that specific sub-fund.

Flow through taxation

The income earned by the CCIV sub-fund trusts will retain its character when received by investors, such that investors will effectively be taxed as if they hold assets of the trust directly (subject to the usual tests such as Division 6C). Whilst the CCIV pays legal form dividends, the income received by investors will not be taxed as dividends but rather taxed as distributions from a trust.

Fixed entitlement to income and capital

Investors will be deemed as having a vested and indefeasible interest in the income and capital of the sub fund-fund trusts. This is relevant for the utilisation of trust losses and application of franking credit provisions.

Concessional withholding rates

If a sub-fund qualifies as a MIT, distributions to investors who reside in countries that have an Exchange of Information Agreement with Australia may be subject to the lower concessional withholding rate of 15% on certain types of income (excluding interest, dividend and royalty income).

Capital account election

In addition to the above, if the sub-fund trust qualifies as a MIT it can make an election to treat certain assets as on capital account. This will mean that in most cases asset disposals will be treated as capital gains which may be a more favourable tax outcome for both resident and non-resident investors.

Disadvantages of a CCIV

Rollover relief

There are currently no specific rollovers or concessions which would allow existing fund structures to seamlessly convert to the CCIV regime without any income tax implications. Existing CGT roll-overs may apply in some cases and should be considered accordingly. This limitation may make it difficult to transfer existing “in the money” investments to the CCIV regime.

Tax losses

Currently, there are no specific provisions which allow the transfer of revenue or capital losses from an existing structure into a CCIV structure. This means an entity converting to a CCIV would currently not be able to retain any existing tax or capital losses.

Trust income

Under the CCIV regime, the definition of income in relation to the sub-fund trusts is broadly determined based on accounting profit of the trust. The limited flexibility in defining income could result in unintended and unfavourable income tax consequences with respect to income earned by the sub-fund trusts.

Duty & land tax

There is yet to be any guidance released by the various States in relation to the treatment of CCIV entities from a duty or land tax perspective.

How SW can assist

There will be cases where the CCIV regime will provide clear benefits to fund managers and to investors.  These will predominantly relate to where the fund is either attracting foreign investment, or where the fund is designed to invest in foreign assets (even if the investors are domestic). 

Given the challenges in converting from a traditional trust structure to a CCIV, the CCIV regime should be considered even if these international factors are not present at the inception of the fund but are recognised as possibilities in later years.

Reach out to our team to discuss whether the CCIV regime is appropriate for your fund.

Click here to find out more about how we work with fund managers and financial services business across the sector.

Contributors

Carmelin De Francesco, Senior Manager, Tax

The post Corporate Collective Investment Vehicle Regime (CCIV) appeared first on SW Accountants & Advisors.

For the sixth year, we deliver an interactive 5-part seminar series to aspiring and emerging leaders in the Property Fund Management sector, with direct access to leading industry experts and their experience, strategic industry insights and pitfalls, and key issues ranging from structuring, debt and equity through to legal and compliance.

Facilitated by our property funds specialists, featuring content developed alongside industry, each session features practical working considerations and discussions with market leaders.

Series speakers

Industry speakers

• David Southon | Aliro Group
• Howard Brenchley | APN Property Group
• David Omond | KM Property Funds
• Chris Langford | Newmark Capital
• Emma Donaghue | McMahon Clarke
• Georgia Liu | Commonwealth Bank of Australia

SW speakers

Simon Tucker
Director, Tax 
SW

Rami Eltchelebi
Partner, Assurance and Advisory Services
SW 

Stephen O’Flynn
Director, Tax
SW

Abi Chellapen
Director, Tax 
SW

Sejla Kadric
Director, Business & Private Client Advisory 
SW

Matthew Schofield
Director, Corporate Finance
SW

Contact us

If you have any queries or would like more information, please contact the Marketing team via marketing@sw-au.com.

The post Emerging Property Fund Managers series 2022 appeared first on SW Accountants & Advisors.

从2021年7月1日起，SIV合规基金的基金经理需要任命一名外部审计师，每年按照合规投资框架对基金进行审计，包括新兴公司部分和平衡投资部分。

基金经理和移民代理也将了解到，重大投资者类别和投资者类别签证的申请人必须按照合规投资框架进行资金投资。

根据《2015年移民（IMMI 15/100：合规投资）工具》的规定，内政部最近对相关要求做出了一些修改，其中包括对合规资产的修改，以及对合规投资框架中的新兴公司部分和平衡投资部分进行年度合规审计。

SIV申请人–您需要做什么？

所有在2021年7月1日之后获提名申请重大投资者签证或投资者签证的申请人都要在其签证申请中附上审计报告，以证明在截至2022年6月30日的一年中以及往后每一年，他们所投资的基金符合合规投资框架的规定。基金经理将提供这些文件。

在没有合规性审计报告的情况下，签证申请被批准的可能性非常小。

SIV基金经理和移民代理——您需要了解什么？

信永中和澳大利亚如何帮助您

在我们与整个行业的基金经理广泛合作的基础上，信永中和澳大利亚的专业审计团队完全了解签证申请人、移民代理和基金经理的适用审计要求，并拥有丰富的相关审计工作经验。

我们的SIV基金审计服务为SIV合规基金提供高效率且有实效的审计，以确保这些基金符合《2015年移民（IMMI 15/100：合规投资）工具》所规定的新兴公司和平衡投资部分。

请联系本事务所的SIV审计专家穆芮内和艾汝谧咨询。

基金管理领域的税务专家包括：

池澜滨、谭赛蒙、欧斯迪

The post 重大投资者签证基金 – 合规审计 appeared first on SW Accountants & Advisors.

From 1 July 2021, fund managers of SIV compliant funds are required to appoint an external auditor to annually audit the fund with the Complying Investments Framework for the emerging companies’ component and the balancing investments component.

As fund managers and migration agents will know, visa applicants for the significant investor stream and the investor stream visas are required to invest their funds in accordance with the Complying Investments Framework.

The department of Home Affairs recently made several changes to the requirements, as stipulated in the Migration (IMMI 15/100: Complying Investments) Instrument 2015. These included changes to complying assets and for the emerging companies component and the balancing investments component of the complying investments framework to be audited annually for compliance.

SIV applicants – what do you need to do?

All applicants who were nominated to apply for a Significant Investor Visa or an Investor Visa after 1 July 2021 will be required to attach audit reports to their visa application to show that for the year ended 30 June 2022 and annually thereafter, the fund/(s) they have invested in comply with the complying investments framework. These will be obtained from their fund managers.

It is highly unlikely that a visa application will be approved without the compliance audit report.

SIV fund manager & migration agents – what do you need to know?

How SW can help

Building on our extensive work with fund managers across the sector, the SW specialist audit team fully understands the audit requirements as applicable to visa applicants, migration agents and fund managers, and has significant experience with these audits.

Our SIV fund audit service provides efficient and effective audits for SIV compliant funds to ensure these comply with the emerging companies and balancing investments components as required by the Migration (IMMI 15/100: Complying Investments) Instrument 2015.

Reach out to our SIV Audit experts, Rene Muller and Rami Eltchelebi, to start the conversation.

Fund management tax experts include:

Abi Chellapen, Simon Tucker, Stephen O’Flynn

The post Significant Investor Visa Funds – compliance audit appeared first on SW Accountants & Advisors.

Stephen has acted for a diverse range of clients including individuals, large private groups, government entities and public groups across the funds management, property, manufacturing and higher education sectors. He is a sought after presenter and is a regular speaker at property and higher education seminars on relevant tax issues impacting these sectors.

Stephen’s experience includes:

• Providing strategic advice for tax due diligence on Australian and international property acquisitions
• Advising on European real estate acquisitions valued at over A$2Billion
• Delivering tax compliance for foreign pension funds that have invested in $750m+ real estate in Australia
• Providing tax structuring advice for foreign multinationals investing in Australia, including in relation to income tax, withholding taxes, MIT regime, indirect taxes and employment taxes. The advice covers optimal profit repatriation and exit strategies
• Advising in relation to tax structuring for clients looking to invest in the US, UK, Germany, Spain, Italy, Greece, Singapore, Hong Kong and India
• Assisting clients in relation to complex tax consolidation, CGT, and tax loss recoupment issues, including issues arising on the sale or restructure of businesses and ensuring that appropriate roll-overs are utilised
• Successfully obtaining refunds of withholding tax for clients which have been incorrectly deducted by foreign tax authorities
• Undertaking GST reviews to maximise reduced input tax credit claims
• Performing the role of Tax Technical Advisor for Thomson Reuters’ One Source FBT software.

Stephen is a Partner of SW Audit and a Director of SW Accountants & Advisors Pty Ltd.

The post Stephen O’Flynn, Partner appeared first on SW Accountants & Advisors.