Document ID: chunk:federal_register_of_legislation:F2025L00184:reg:13:p3
Version: federal_register_of_legislation:F2025L00184
Segment Type: reg
Provision Reference: reg 13 (pt 3/4)
Character Range: 14177–16962

Example 6: Continuing example 5, if the deductible gift recipient defaults on the loan and the charity is called on under the guarantee to make a payment to the financial institution on behalf of the deductible gift recipient, the payment is also a distribution (being the provision of money, property or benefits).

 (5) If the Commissioner requests a community charity to rectify a shortfall in the distribution for a *financial year, the charity must comply with the request within 60 days.
Penalty: 10 per cent of the shortfall as at the end of the 60 days reduced, but not below nil, by any penalty under subsection (1).

 (6) A distribution made to rectify a contravention of subsection (1) does not count towards compliance with that subsection for a later year in which the rectification occurs.

       Accessing a lower minimum distribution rate for a financial year

 (7) Upon application, in the *approved form, the Commissioner may reduce (but not to zero) the minimum annual distribution rate for a community charity for a *financial year. The reduction may be subject to any conditions the Commissioner thinks fit.

 (8) The Commissioner may reduce the minimum annual distribution rate only if the Commissioner is satisfied that there are circumstances that warrant the Commissioner reducing the rate, having regard to the matters listed in subsection (10).

 (9) The Commissioner may reduce the minimum annual distribution rate at any time, including after the relevant *financial year has ended.

 (10) In determining whether, and by how much, to reduce the rate, the Commissioner must have regard to:
 (a) the purposes of the community charity; and
 (b) the general market conditions in Australia; and
 (c) the past, current and expected levels of returns from the charity's investments; and
 (d) the long‑term impact on the assets of the charity from not reducing the rate for a *financial year; and
 (e) the level of distributions made by the charity in previous financial years; and
 (f) the investment and distribution strategy of the charity; and
 (g) the size of the charity; and
 (h) the compliance history of the charity and its trustee or corporate director (as the case requires); and
 (i) the fees and expenses of the charity; and
 (j) the terms and other circumstances relating to any gift to the charity under a will; and
 (k) any other matter the Commissioner considers relevant.
Note: Having regard to general market conditions in Australia could include reviewing the Reserve Bank of Australia's target for the cash rate (which is the overnight money market interest rate), the base interest rate, current returns of other community charities (year on year), and the performance of approved stock exchanges. It could also include examining changes in