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Australia High Court Gives Expansive Definition of Tax-Exempt Charity

By Howard M. Friedman

In Commissioner of Taxation of the Commonwealth of Australia v Word Investments Limited, [2008] HCA 55 (Dec. 3, 2008), Australia's High Court held that "a company that conducted commercial businesses to raise funds for a missionary organisation was entitled to the status of a tax-exempt charity." (High Court press release). In a 4-1 decision, the court held that Word Investments, an investment business (which also formerly operated a funeral business), is a charitable institution because all of its profits support the Christian activities carried out by Wycliffe Bible Translators which is a recognized charity. Under its memorandum, Word's profits may not be distributed to its members. A report on the decision from the law firm of Corney & Lind says that the decision will now permit charities "to pursue 'asset protection' strategies, by incorporating separate entities to raise funds for their charitable purposes."

Full post as published by Religion Clause on December 12, 2008 (boomark / email).