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Charities & Not-For-Profits Law in Australia

Trust Funds for Charitable Purposes – the High Court rules

By Bill d'Apice on Posted in Compliance, General, Tax Exemptions & DGR Status

Australian notesSummary - The High Court handed down its decision in Commissioner of Taxation v Bargwanna on 29 March 2012 ruling that trust funds in a charitable trust must be applied for the purpose of the charitable trust, and not just “substantially” or “on the whole”.

On 29 March, the High Court handed down its decision in the long running case of Commissioner of Taxation v Bargwanna allowing the appeal by the Commissioner of Taxation.

Mr and Mrs Bargwanna were the trustees of the “Kalos Metron Charitable Trust”.  Between 2003 and 2007, the trustees distributed a total of $293,914.55 to numerous charitable cases.

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In Australia Tax Concession Requirements Reviewed

By Bill d'Apice on Posted in Compliance, General, Governance, Tax Exemptions & DGR Status

Summary – The Assistant Treasurer has issued a further Exposure Draft on proposed legislation restating and standardizing special conditions for tax concession charities including Map of Australiathe “In Australia” conditions.

The Assistant Treasurer has now released a further Exposure Draft of legislation restating and standardising special conditions for tax concession entities and, in particular, refining the “In Australia” special conditions.

Under the current law, tax concession charities and deductible gift recipients have different requirements concerning their obligations to operate “In Australia” to access tax concessions.

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The Status of Priests and Churches – Supreme Court Judgement

By Bill d'Apice on Posted in General

York CathedralSummary – The Supreme Court has handed down a judgment in the case involving the Anglican Diocese of Newcastle and two priests who had been the subject of a recommendation from a Church Board that they be defrocked.  The judgment deals with important issues relating to the employment status of priests, the legal status of churches and circumstances in which a court will interfere in the internal workings of a church.

On 27 April 2012 Justice Sackar handed down judgment in the case of Sturt and Anor  v  the Right Reverend Dr Brian Farran, Bishop of Newcastle and Ors.  In these proceedings, Fr Sturt and Fr Lawrence (the priests) sought orders against the Anglican Bishop of Newcastle, the members of the Professional Standards Board (PSB), the members of the Professional Standards Committee of the Diocese of Newcastle (the PSC) and the Primate of the Anglican Church of Australia.

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Release of Public Ancillary Fund Package

By Kylie Maxwell and Bill d'Apice on Posted in Compliance, Fundraising, General, Tax Exemptions & DGR Status

Summary – A Public Ancillary Fund Package is available to easily establish or vary a Public Ancillary Fund.Package

From today onwards, our Public Ancillary Fund Package is available to those who wish to set up a new public ancillary fund or to vary an old public ancillary fund to maintain its endorsement, including necessary applications or notifications to the Australian Taxation Office.  This package has been designed to enable compliance with the new complex laws that commenced on 1 January 2012.

We have reviewed the Model Trust Deed suggested by the Australian Taxation Office and made some amendments to it to develop the best Model Trust Deed that we can make available to our clients.  It is still compliant with the requirements of the Australian Taxation Office.

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NSW State Legal Conference

By Bill d'Apice and Kylie Maxwell on Posted in Compliance, General, Governance, Tax Exemptions & DGR Status

Speaker at ConferenceSummary - Bill d’Apice and Kylie Maxwell presented to the NSW State Legal Conference on NFP structures and the reform agenda for charities and NFPs on 27 March 2012.

Bill d’Apice and Kylie Maxwell both gave presentations to many lawyers and sector representatives at the request of organisers of the NSW State Legal Conference. They addressed current issues affecting Charities and Not-For-Profits in relation to entity structures, public juridical persons, changes to the laws affecting Public Ancillary Funds, the proposed unrelated business income tax, proposals concerning “In Australia” requirements for certain entities and possible changes to governance requirements with the upcoming Australian Charities & Not-For-Profits Commission.

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Church Trust Property in the Macedonian Orthodox Church

By Bill d'Apice on Posted in General, Governance

Summary - The Supreme Court has passed judgment again on the dispute over church trust property in the Macedonian Orthodox Church.

There has been a long running dispute between the Macedonian Orthodox Diocese of Australia and New Zealand (Church) and the Macedonian Orthodox Community Church St Petka Incorporated (Association).

At the core of the dispute is a contest for control of the affairs of the Parish of St Petka between the Church hierarchy represented by the Bishop and his appointed Priest on the one hand and, on the other, the Association which claims to represent the parishioners.  An essential feature of the dispute is the tension between adherence to church law and adherence to the constitution of the Association.

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School Funding Suspended

By Bill d'Apice on Posted in Compliance, Governance

Summary - NSW Government Freezes Islamic Schools Funding under Section 21AOld run-down school building

It has been about five years since the NSW Government introduced section 21A of the Education Act which prohibits funding assistance being paid to non government schools operating for profit.

For the first time, to our knowledge, the NSW Government has used this section to freeze funds to a non government school.

The NSW Government is reported to have frozen funding to Sydney’s largest Islamic school, Malek Fahd, after an investigation into payments the school made by way of management fees and backdated rental fees to its owner, the Australia Federation of Islamic Councils, the nation’s peak Muslim body.

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Fundraising Reform for Charities

By Belinda Huang and Bill d'Apice on Posted in Compliance, Fundraising

Stack of documentsSummary - The Treasurer released a consultation paper on charitable fundraising reform in February 2012.

The Treasury recently released a discussion paper and draft regulation impact statement in relation to proposed charitable fundraising reform.  At the moment, all States and Territories in Australia (except the Northern Territory) have their own fundraising regulations and they have different requirements for registration and compliance. The discussion paper proposes to introduce standardised fundraising laws across Australia.

The kinds of “fundraising activity” subject to regulation, as proposed by the paper, would encompass any activity involving the solicitation or receipt of money or other property primarily for a “charitable purpose”.  “Charitable purpose” will be defined in accordance with the upcoming statutory definition of “charity”, currently contemplated by the Commonwealth Government.  The requirement for a “charitable purpose” suggests that fundraising activities for causes that do not fall within the definition of “charity” will not be caught by the proposed national fundraising laws.

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Netball NSW 2012 Conference

By Belinda Huang on Posted in General

Kylie Maxwell presenting at the Netball NSW 2012 ConferenceSummary - Makinson & d’Apice Lawyers presented at the 4th Biennial Netball NSW Conference.

On the sunny morning of Saturday, 25 February 2012, Kylie Maxwell and I gave presentations to attendees of the 4th Biennial Netball NSW Conference at Sydney Olympic Park.  The Conference was organised by Netball NSW and we were honoured to have been invited to give a talk about various legal issues relevant to organisers, administrators and co-ordinators of netball and other sports associations and organisations across NSW.

Kylie’s presentation revolved around risk management and reporting requirements for charities and Not-For-Profit organisations.  My presentation was on fundraising in NSW and the laws and regulations associated with fundraising licences.  We both touched upon the anticipated launch of the Australian Charities and Not-For-Profits Commission.

The turn-out of attendees was positive, and from the number and types of questions we received, it was clear that many administrators and co-ordinators of sporting organisations present at our talk were knowledgeable and up-to-date with current issues that affect charities and Not-For-Profits.  We did our best to address the questions raised even though many of the details are still to be worked out by the Government.

Overall, Kylie and I enjoyed the opportunity to present to those attending the Conference and we hope we were able to identify some of the relevant issues that affect charities and Not-For-Profit organisations.  Once again, many thanks for Netball NSW for inviting us to the Conference!

Public Ancillary Funds – New Laws

By Bill d'Apice and Kylie Maxwell on Posted in Compliance, Governance, Tax Exemptions & DGR Status

Summary New laws introduced on 1 January 2012 change the way public ancillary funds are structured, operated and wound up.

On 1 January 2012, new laws governing the definition and operation of public ancillary funds came into force.  The definition is now the cornerstone for organisations seeking to have their ancillary fund endorsed by the Australian Taxation Office as a deductible gift recipient.

Trustees of and donors to public ancillary funds should be aware that:

  • new Public Ancillary Fund Guidelines 2011 (the Guidelines) now apply to certain public ancillary funds;
  • the Guidelines stipulate minimum levels of distributions from the public ancillary fund during a financial year;
  • the Commissioner now has powers to suspend and remove trustees of certain public ancillary funds, and appoint acting trustees in circumstances where the Guidelines are not complied with;
  • the legislation transitions most public ancillary funds into being managed by corporate trustees which meet certain constitutional criteria;
  • administrative penalties apply for breaches of certain rules in the Guidelines;
  • such administrative penalties can be imposed on directors of the corporate trustee in certain circumstances; and
  • there is a “phase-in” period specified for public ancillary funds that are already endorsed as deductible gift recipients.

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