Rachael Rofe
The new year is a time of resolutions and reflection – and many start the year with a plan to sort their financial futures too. With an estimated $150 billion in inheritances transferred last year and a projected $3.5 trillion over the next two decades, January presents an opportunity for Australians to think about giving as part of their financial plan, according to Rachael Rofe, head of the Australian Philanthropic Services (APS) Foundation.
She says for families seeking to leave a meaningful impact, structured giving is a practical and enduring option, with the added bonus of significant tax advantages.
“Private Ancillary Funds (PAFs) and giving funds in public ancillary funds, like the APS Foundation, provide a tax-smart strategy for individuals seeking both an immediate tax deduction and the flexibility to give over time.
“They are an ideal choice for donors facing a significant liquidity event – such as the sale of a business or property resulting in a large tax bill – or for those looking to ring fence wealth specifically for the community.
“Donors can commit capital to their fund, receive a full tax deduction for the amount contributed now, and distribute funds to charities gradually over time.
“With investment returns tax-free, structured giving enables individuals to give and grow funds for greater future charitable impact.”
She said the new year is often a time when people consider their legacy and estate planning options, and that charitable giving is part of this process.
“Legacy and estate planning is about more than passing down assets. It’s about creating a connection between your values and future generations,” Ms Rofe said.
“Structured giving empowers families to ensure their generosity lives on, supporting causes and communities that matter. It goes beyond simply passing on assets. It’s about creating a legacy that reflects values and priorities while supporting the people and communities they care about.”
Ms Rofe outlined two key considerations to help Australians make informed decisions around giving and starting the new year with purpose:
- Giving while living: By starting now, you can actively support the causes you care about, enjoy immediate tax benefits, and engage loved ones in a shared philanthropic journey. A giving structure allows you to refine your vision and test approaches
- A tax-efficient approach to legacy and estate planning: While giving during your lifetime offers the greatest tax benefits, charitable gifts made through your estate can also be tax-efficient. Appreciated assets bequeathed to Deductible Gift Recipients (DGRs), like ancillary funds, are exempt from Capital Gains Tax (CGT).
“Structured giving is a tax effective way to bring purpose and joy during a person’s lifetime. It also allows families to pass down not just wealth, but the profound joy of giving,” Ms Rofe said.
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