Private Ancillary Funds (PAF)
PAFs are funds established by trust instrument to which business, families and individuals can make tax-deductible donations.
As a charitable trust, a PAF has deductible gift recipient (DGR) status and can apply for endorsement as a tax concession charity (TCC) which provides tax exemption for any income earned and allows the PAF to apply for a refund of imputation credits on any fully franked income.
PAFs are required to have a corporate trustee, invest prudently, subject to a written policy, and distribute a minimum of 5% of the value of the trust each year.
Factors to consider when considering a PAF:
- Is this the most appropriate structure for you?
- How much do you want to give?
- Time frame of grants
- Nature of the organisations you want to work with
- Level of control you require
- Level of involvement from other family members.
- How to set up a PAF
- Ongoing administration
- Investment management.
Follow this link to read more about PAF.