If the school insists on placing a maintenance levy, building levy or capital works levy or some other levy above the bottom line on the fee statement, then the words ‘building fund’ should not be used.    In these circumstances the amount should be included in the school fee and a general mention of building maintenance, etc., should be made and the amount simply becomes a component of the overall fee.   The inclusion of a suggested amount on the fee statement below the bottom line and reinforcing the fact that this is a voluntary donation, to receive tax deductibility, should be emphasised with a communication explaining precisely what the building fund is all about.

Having scanned hundreds of school websites and in particular their fees pages in the past six months there are many who would attract the attention of the ATO if what is on the website is in fact what is being charged.   Schools leave themselves open to have their building fund gift fund audited by the ATO and the cost incurred by the school in lost time and potential great embarrassment is not worth the effort of trying to manipulate the system.   Unfortunately it is an Australian trait to see how far one can stretch various definitions and meanings as far as the ATO legislation is concerned, however, the ATO is very clear in its requirements.

It is important for schools to conduct regular self assessments and reviews of their Deductible Gift Recipient (DGR) funds and the administering of these funds to ensure they are complying with the most recent ATO regulations and requirements.

With the constant turn over of staff in Senior Management and Boards of Schools it is quite easy for a Principal to miss an error in law that has been made by a predecessor or previous Business Manager, however the ATO’s approach to these aspects is that ignorance is no excuse.

A timely reminder of the ATO definition of a gift that is eligible to be considered for tax deductibility.

A Gift needs to be a Transfer of beneficial interest in property (money or property needs to have legally changed hands), the Transfer is made voluntarily (there is no coercion to pay even though the ATO allows ‘moral obligation’), it Arises by way of benefaction (there are no strings attached by the school or donor) and No material benefit or advantage by the donor (reduced school fees or school fees prevented from raising).

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