Product Ruling PR 2021/16
Date of effect: 1 December 2021

What this ruling is about: 1. This Product Ruling sets out the Commissioner's opinion on the way in which the relevant provisions identified in the Ruling section apply to the defined class of entities that participates in the scheme to which this Ruling relates. All legislative references in this Product Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997), unless otherwise indicated. 2. In this Product Ruling the scheme involves the holding of an ING Bank (Australia) Limited (ING) Orange Everyday or Orange Everyday Youth bank account (an Everyday Account) and the activation of the Round Up to Charity feature. 3. This Product Ruling does not address:

Class of entities or scheme: 4. This part of the Product Ruling specifies which entities can rely on the Ruling section of this Product Ruling and which entities cannot rely on the Ruling section. Those entities that can rely on the Ruling section are referred to as the Account Holder, being an individual who holds an Everyday Account with ING. 5. The class of entities that can rely on the Ruling section of this Product Ruling consists of those entities who participate in the scheme described in paragraphs 15 to 19 of this Product Ruling by activating the Round Up to Charity feature on or after 1 December 2021 and on or before 30 June 2024. 6. The class of entities that can rely on the Ruling section of this Product Ruling does not include entities who participate in the scheme described in paragraphs 15 to 19 of this Product Ruling by activating the Round Up to Charity feature before 1 December 2021 or after 30 June 2024. | Qualifications: 7. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 15 to 19 of this Product Ruling. 8. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then this Product Ruling:

Ruling: 1. This Product Ruling sets out the Commissioner's opinion on the way in which the relevant provisions identified in the Ruling section apply to the defined class of entities that participates in the scheme to which this Ruling relates. All legislative references in this Product Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997), unless otherwise indicated. 2. In this Product Ruling the scheme involves the holding of an ING Bank (Australia) Limited (ING) Orange Everyday or Orange Everyday Youth bank account (an Everyday Account) and the activation of the Round Up to Charity feature. 3. This Product Ruling does not address: | Class of entities: 4. This part of the Product Ruling specifies which entities can rely on the Ruling section of this Product Ruling and which entities cannot rely on the Ruling section. Those entities that can rely on the Ruling section are referred to as the Account Holder, being an individual who holds an Everyday Account with ING. 5. The class of entities that can rely on the Ruling section of this Product Ruling consists of those entities who participate in the scheme described in paragraphs 15 to 19 of this Product Ruling by activating the Round Up to Charity feature on or after 1 December 2021 and on or before 30 June 2024. 6. The class of entities that can rely on the Ruling section of this Product Ruling does not include entities who participate in the scheme described in paragraphs 15 to 19 of this Product Ruling by activating the Round Up to Charity feature before 1 December 2021 or after 30 June 2024. | Qualifications: 7. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 15 to 19 of this Product Ruling. 8. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then this Product Ruling:


Appendix: Deductibility of Round Up Amounts: Division 30: 20. A donor can claim a tax deduction for a gift if the requirements in section 30-15 are satisfied. The table in subsection 30-15(2) sets out the categories of recipients of deductible gifts and contributions, the types of deductible gifts or contributions that can be made to each category of recipients, how much can be deducted and special conditions that require satisfying. | Gift recipient: 21. Table item 2 of subsection 30-15(2) states that deductible gifts and contributions can be made to: 22. As recognised in paragraph 18(l) of this Product Ruling, Intelligent Foundation is a recipient covered under table item 2 of subsection 30-15(2) on the basis that it is a public ancillary fund [4] established and maintained for the sole purpose of receiving money from donors and on-paying that money to the charities, each of which should be a fund, authority or institution covered by an item in any of the tables in Subdivision 30-B (and therefore a recipient to which gifts are deductible under table item 1 of subsection 30-15(2)). | Type of gift: 23. Table item 2 of subsection 30-15(2) provides that the deductible gifts and contributions that can be made to a table item 2 recipient include gifts of money. Money can be paid in various ways, including by cash, cheque, credit card or electronically. 24. Under the Round Up to Charity feature, Account Holders will pay the Round Up Amounts (money) to Intelligent Foundation. 25. The meaning of 'gift' for the purposes of Division 30 is dealt with in Taxation Ruling TR 2005/13 Income tax: tax deductible gifts - what is a gift. The word 'gift' is not defined in the ITAA 1997 and, for the purposes of Division 30, has its ordinary meaning. 26. The courts have described a gift as having the following characteristics and features: 27. The Round Up Amounts constitute a gift of money as: | Amount of gift that can be deducted: 28. Table item 2 of subsection 30-15(2) states that the amount that can be deducted for a gift of money is the amount that is given. 29. The amount given by the Account Holders in the form of Round Up Amounts under the Round Up to Charity feature for the income year will only include Round Up Amounts that are transferred to Intelligent Foundation from the ING Holding Account during the income year. | Special conditions: 30. Table item 2 of subsection 30-15(2) requires the following special conditions to be satisfied: 31. In relation to the special condition in paragraph (a) of table item 2 of subsection 30-15(2), an Account Holder can add together a series of Round Up Amounts in an income year to work out whether the gift is $2 or more. 32. As an endorsed deductible gift recipient covered by table item 2 of subsection 30-15(2), the special conditions at paragraphs (b) and (c) of that subsection will also be satisfied. That is: 33. Subject to the Round Up Amounts of an Account Holder using the Round Up to Charity feature being $2 or more for the income year, each of the requirements in table item 2 of subsection 30-15(2) will therefore be satisfied, and the Account Holder will be able to claim a deduction under section 30-15 for the Round Up Amounts that are transferred to Intelligent Foundation from the ING Holding Account during the income year. 34. Where the Everyday Account from which the Round Up Amounts are transferred is jointly owned by two Account Holders, the extent to which those Account Holders will be able to claim a deduction under section 30-15 for the Round Up Amounts will be in proportion to their beneficial interest in the Everyday Account. 35. Unless there is evidence to the contrary, it will be presumed that each of those Account Holders have an equal beneficial interest in the Everyday Account and will therefore share the deduction in equal proportions. | Evidence of a gift: 36. In the making of an assessment under section 166 of the ITAA 193 6, the Commissioner may disallow an amount claimed under section 30-15 as a gift of money if the taxpayer does not hold sufficient evidence that demonstrates an entitlement to the deduction claimed. 37. Deductible gift recipients are not required to issue receipts. As Intelligent Foundation will not issue receipts for Round Up Amounts transferred using the Round Up to Charity feature, Account Holders will rely on their quarterly Everyday Account bank statements as evidence of the gift. 38. Guidance in relation to the records needed to evidence a gift is provided in the ATO online publication Gifts and fundraising: Receipts from third parties which states: 39. The Account Holder's quarterly Everyday Account bank statements will be sufficient written evidence to substantiate a deduction being claimed under section 30-15 on the basis that: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft


What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling. | Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends a financial (or other) adviser be consulted for such information. | This Product Ruling provides certainty for potential participants by confirming that the tax benefits set out in the Ruling part of this document are available, provided that the scheme is carried out in accordance with the information we have been given, and have described below in the Scheme part of this document. If the scheme is not carried out as described, participants lose the protection of this Product Ruling. | Date of effect: 9. This Product Ruling applies prospectively from 1 December 2021. It applies only to the specified class of entities that enter into the scheme by activating the Round Up to Charity feature from 1 December 2021 until 30 June 2024, being its period of application. This Product Ruling will continue to apply to those entities even after its period of application has ended for the scheme entered into during the period of application. | 10. However, the Product Ruling only applies to the extent that there is no change in the scheme or in the entity's involvement in the scheme. | Changes in the law: 11. Although this Product Ruling deals with the income tax laws enacted at the time it was issued, later amendments may impact on this Product Ruling. Any such changes will take precedence over the application of this Product Ruling and, to that extent, this Product Ruling will have no effect. | 12. Entities who are considering participating in the scheme are advised to confirm with their taxation adviser that changes in the law have not affected this Product Ruling since it was issued. | Note to promoters and advisers: 13. Product Rulings were introduced for the purpose of providing certainty about tax consequences for entities in schemes such as this. In keeping with that intention, the Commissioner suggests that promoters and advisers ensure that participants are fully informed of any legislative changes after the Product Ruling has issued. | 14. Subject to paragraph 3 of this Product Ruling and the assumptions in paragraph 19 of this Product Ruling: | 15. The scheme that is the subject of this Product Ruling is identified and described in the following documents: | Note: Certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. | 16. For the purposes of describing the scheme to which this Product Ruling applies, there are no other agreements, whether formal or informal, and whether or not legally enforceable, which an Account Holder, or any associate of an Account Holder will be a party to, which are a part of the scheme. Unless otherwise defined, capitalised terms in this Product Ruling take their meaning as per the Terms and Conditions. | 17. All Australian Prudential Regulation Authority requirements are, or will be, complied with. | Overview: 18. Following is a summary of the scheme: | Assumptions: 19. This Product Ruling is made on the basis of the following necessary assumptions: | Commissioner of Taxation 1 December 2021 | (a) the value of the gift must be $2 or more; and | (b) the terms of the will or trust must allow the trustee to invest money that the ancillary fund receives because of the gift only in a way that an Australian law allows trustees to invest trust money; and | (c) the ancillary fund must meet the requirements of section 30-17; and | (d) if the property is to be valued by the Commissioner - the requirements of section 30-212 are satisfied. [6]


Related rulings: TR 2005/13
Legislative references: ITAA 1936 166 ITAA 1936 Pt IVA ITAA 1997 26-55(2) ITAA 1997 Div 30 ITAA 1997 30-15 ITAA 1997 30-15(2) ITAA 1997 30-17 ITAA 1997 Subdiv 30-B ITAA 1997 30-120 ITAA 1997 Subdiv 30-DB ITAA 1997 995-1(1) TAA 1953 426-102 Sch 1 Australian Charities and Not-for-profits Commission Act 2012
Other references: Gifts and fundraising: Receipts from third parties