Document ID: chunk:federal_register_of_legislation:F2022L00184:clause:1_15:p1
Version: federal_register_of_legislation:F2022L00184
Segment Type: clause
Provision Reference: sch 1 cl 15 (pt 1/4)
Character Range: 12673–15338

15  Minimum annual distribution
 (1) During each *financial year, a *public ancillary fund must make distributions of amounts that are in total equal to at least 4 per cent (minimum annual distribution rate) of the *market value of the fund's net assets (as at the end of the previous *financial year) in accordance with this section.
Note 1: While net assets are used to determine the fund's minimum distribution, the total distribution that must be made is not net of any amount (for example, expenses of the fund).
Note 2: The minimum annual distribution rate, for a financial year, may be lowered under subsections (3) and (7).
Penalty: 30 penalty units if the shortfall is greater than $1,000.
 (2) Further to subsection (1), a *public ancillary fund must distribute at least $8,800 (or the remainder of the fund if that is worth less than $8,800) during a *financial year if any expenses of the fund in relation to that financial year are paid directly or indirectly from the fund's assets or income.
Note: This means that if a fund's expenses are met from outside the fund, its minimum annual distribution is the amount calculated under subsection (1). If any of a fund's expenses are paid out of the fund's assets or income, its minimum distribution is $8,800 or the amount calculated under subsection (1), whichever is greater.
 (3) However, no distribution is required during the *financial year in which a *public ancillary fund is established or during the 4 financial years following the financial year in which the fund is established.
Note: While this instrument does not require a minimum annual distribution for newly established public ancillary funds, the trustee should still have regard to the purpose of the fund when deciding on an appropriate annual distribution during those early years.
 (4) A distribution is the provision of money, property or benefits. Where a fund distributes property or benefits, the *market value of the property or benefit provided is to be used in determining whether the fund has complied with subsection (1).
Example 1: Where a public ancillary fund makes a gift of land to a public benevolent institution, it would include the market value of the land in calculating how much it has distributed.
Example 2: Where a public ancillary fund grants a lease of office space to an eligible deductible gift recipient at a discount to the market price, the fund is providing a benefit the market value of which is used in calculating how much it has distributed. The fund may determine the market value as an amount equal to the discount.
Example 3: Where a public ancillary fund invests in a social impact bond that is