Tax incentive for testamentary gifts to arts organisations recommended

The Government has released a report of a review examining private sector support for the arts chaired by Harold Mitchell AC. The review aimed to identify any barriers or impediments that may exist in Australia with respect to private sector support for the arts.

 The report's recommendations included:

• Introducing a tax incentive for testamentary gifts to arts organisations - According to the report, testamentary giving represents great potential for growth in private sector support, particularly for the arts. The report suggested that testamentary giving could be made more attractive to those considering leaving a donation in their wills. It said an immediate tax deduction for a bequest has the potential to capture a wide cross section of donors. The report recommended the Government introduce the capacity for private donors to provide a cash gift through their will to an arts organisation, and to receive an immediate taxation benefit for the present value of the gift.
• Transferring the Cultural Gift Program and Register of Cultural Organisation programs to the Tax Office - The Cultural Gifts Program (CGP) provides donors of items of cultural significance to collecting institutions with a tax deduction to the value of the gift, along with an exemption from CGT in relation to any increase in the value of the gift being gifted. Currently, portfolio responsibility for the CGP rests with the Office for the Arts. The report indicated stakeholder concerns regarding application processes for the Program including multiple valuations that need to be undertaken for tax purposes. The report looked at ways in which the CGP application process could be simplified. It recommended transferring responsibility for the Cultural Gifts Program to the Tax Office, with the Australian Valuation Office appointed as the primary valuer for the Program and the Office for the Arts maintaining an advisory role.
• Cultivating tax incentive awareness - The report indicated concerns about a lack of awareness about current tax incentives offered to donors. The report recommended the Government conduct an awareness-raising program, targeting financial planners, taxation accountants and estate lawyers, providing information on taxation and testamentary giving incentives available to encourage private sector support for the arts.
• Introducing a matched funding program - The report states that in Australia and overseas, matched funding programs have proven an effective incentive for encouraging increased private sector support from businesses and individuals. The report recommended the Government commits funding to support a "matched funding for the arts" initiative.

The findings of the review will assist in the development of policy options with respect to enhancing the private sector’s contribution to the arts. Arts Minister Simon Crean said the Government would consider the recommendations as part of the development of the National Cultural Policy.

Click here to read the report in full.