Cover sheet for: TR 2011/4
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This cover sheet is provided for information only. It does not form part of the binding public ruling.
There is a Compendium for this document. TR 2011/4EC
Cover sheet for: TR 2011/4 1

Taxation Ruling
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Taxation Ruling
Income tax and fringe benefits tax:
charities

This publication provides you with the following level of
protection:

This publication (excluding appendixes) is a public ruling for the purposes of
the Taxation Administration Act 1953 .
Contents Para
LEGALLY BINDING
SECTION:
What this Ruling is about 1
A public ruling is an expression of the Commissioner’s opinion about the way
evant provision applies, or would apply, to entities generally or
to a class of entities in relation to a particular scheme or a class of schemes. in which a rel
Ruling 7
Date of effect
104
If you rely on this ruling, the Commissioner must apply the law to you in the
way set out in the ruling (unless the Co mmissioner is satisfied that the ruling
is incorrect and disadvantages you, in which case the law may be applied to
you in a way that is more favourable for you – provided the Commissioner is
revented from doing so by a time limit imposed by the law). You will be
cted from having to pay any under paid tax, penalty or interest in
respect of the matters covered by this ruling if it turns out that it does not
correctly state how the relev ant provision applies to you.
NOT LEGALLY BINDING
SECTION:
Appendix 1:

not p
prote
Explanation
105
Appendix 2:
Alternative views 315
Appendix 3:
What this Ruling is about Detailed contents list 338

1. This Ruling sets out the Commissioner’s views on the
meaning of ‘charitable’ in the terms ‘charitable institution’ and ‘fund
established for public charitable purposes’ wherever those terms are
used in the Income Tax Assessment Act 1997 (ITAA 1997), the
Fringe Benefits Tax Assessment Act 1986 (FBTAA) and the Income
Tax Assessment Act 1936 (ITAA 1936). In particular, the Ruling
considers the meaning of charitable for the purposes of:
• items 1.1,1.5,1.5A and 1.5B of the table in section 50-5
of the ITAA 1997, which provide income tax exemption
for various entities;
• Division 30 of the ITAA 1997, which provides for tax
deductions for gifts. In particular:
– item 1.1.6 of the table in subsection 30-20(1) of
the ITAA 1997 dealing with charitable
institutions that promote the prevention or
control of diseases in humans;
– item 4.1.4 of the table in subsection 30-45(1) of
the ITAA 1997 dealing with public funds
maintained by charitable institutions on the
register of harm prevention charities;

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– item 4.1.5 of the table in subsection 30-45(1) of the
ITAA 1997 dealing with a public fund established
for charitable purposes solely to provide money for
the relief of people in Australia in distress as a
result of a disaster to which subsection 30-45(1A)
or subsection 30-46(1) applies;
– item 4.1.6 of the table in subsection 30-45(1) of
the ITAA 1997 dealing with a charitable
institution providing short term care or
rehabilitation to injured, sick and orphaned
animals;
– item 4.1.7 of the table in subsection 30-45(1) of
the ITAA 1997 being a charitable institution that
would be a public benevolent institution (PBI)
but for the fact it promotes the prevention or
control of disease in human beings (but not as
a principal activity) and/or it promotes the
prevention or control of behaviour that is
harmful or abusive to human beings (but not as
a principal activity);
• section 207-115 of the ITAA 1997, which relates to
refunds of excess imputation credits to certain exempt
institutions;
• subsection 57A(5) of the FBTAA, which provides fringe
benefits tax exemption in relation to benefits provided
by employers that are health promotion charities
endorsed under subsection 123D(1) of the FBTAA; and
• section 65J of the FBTAA, which provides for a rebate
of fringe benefits tax to rebatable employers including
endorsed charitable institutions.
2. It explains the Commissioner’s view on:
• the features that distinguish a charitable institution from
a charitable fund;
• the circumstances in which an institution or fund will be
considered charitable;
• determining whether the purpose of an institution or
fund is charitable; and

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• the decisions of the High Court in Central Bayside
General Practice Association Ltd v. Commissioner of
State Revenue (2006) 228 CLR 168 ; [2006] HCA 43
(Central Bayside ), Federal Commissioner of Taxation
v. Word Investments Limited (2008) 236 CLR 204;
[2008] HCA 55 (Word Investments) and Aid/Watch
Incorporated v. FC of T [2010] HCA 42; 2010 ATC
20-227; (2010) 77 ATR 195 (Aid/Watch), and the
decisions of the Federal Court in Navy Health Limited
v. Federal Commissioner of Taxation (2007) 163 FCR
1; [2007] FCA 931 ( Navy Health) and Victorian Women
Lawyers’ Association Inc v. Federal Commissioner of
Taxation (2008) 170 FCR 318; [2008] FCA 983
(Victorian Women Lawyers ).
3. It does not consider the following:
• aspects of Division 30 of the ITAA 1997 other than
whether an institution is a charitable institution or
whether a fund is established for charitable purposes;
• other items of income tax exemption listed in
Division 50 of the ITAA 1997;
• the special conditions referred to in the table in
section 50-5 of the ITAA 1997;
• other requirements for a refund of excess imputation
credits for institutions covered by section 207-115 of
the ITAA 1997;
• the application of section 65J of the FBTAA; or
• the endorsement processes for charities.
4. The Ruling applies to charitable institutions and charitable
funds and persons who make gifts to charitable institutions and
charitable funds.

Definitions
5. For the purposes of this Ruling the following key terms are
used:
‘charity ’ is used to describe both charitable institutions and
charitable funds.
‘ charitable purpose ’. Charitable institutions can have more
than one charitable purpose. The term ‘charitable purpose’ is
commonly used in this Ruling to include multiple charitable
purposes.

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‘public charitable purposes ’ is synonymous with ‘charitable
purposes’. As such, although the term ‘public charitable
purposes’ is used in section 50-5 of the ITAA 1997 in relation
to funds, it is not considered separately in this Ruling.
‘ purpose ’ and ‘objects’ are used in this Ruling to distinguish
between two different aspects of purpose. ‘Objects’ is used for
written statements in the constituent documents (where they
will have titles such as ‘objects’, ‘purposes’, ‘trusts’ or ‘aims’).
‘Purpose’ is used for the substance and reality, as judged in
the light of the relevant circumstances (referred to in the cases
as ‘purposes’, ‘objects’, ‘objectives’ and other similar terms).
‘sole purpose’ is used in this Ruling to mean the only or the
‘main or predominant or dominant’ purpose of an institution as
described in paragraph 27 of this Ruling. It has been used
because the only purposes a charitable institution can have
are charitable purposes or purposes incidental or ancillary to
charitable purposes. It also helps avoid misunderstandings
that can arise because of different usages (especially in a
taxation context) of various terms that have been used by the
courts to describe the required purpose.
‘ Statute of Elizabeth’ is a reference to the Preamble to the
Statute of Charitable Uses 1601 43 Elizabeth 1 c.4.
‘ tax law ’ is used in this Ruling to mean the ITAA 1936, the
ITAA 1997 and the FBTAA.

Previous Rulings
6. This Taxation Ruling finalises draft Taxation Ruling
TR 2011/D2 which replaced Taxation Ruling TR 2005/21 Income tax
and fringe benefits tax: charities. TR 2005/21 was withdrawn on
11 May 2011.

Ruling
7. Tax law provides certain concessional tax treatments for
charitable institutions and funds that are ‘established for public
charitable purposes’ as specified in section 50-5 of the ITAA 1997. A
charitable institution is an institution established and maintained for
purposes that are charitable. For a fund to be ‘established for public
charitable purposes’, its purposes must be charitable.

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8. The word ‘charitable’ is not defined in the ITAA 1936, the
ITAA 1997 or the FBTAA. The courts have determined that it does not
bear its ordinary meaning but instead is given its technical legal
meaning unless a contrary intention appears from the context in
which it is used.
1
9. The decisions of the High Court and the Federal Court
referred to in paragraph 2 of this Ruling have refined the factors
previously thought to impose restrictions on entities claiming
charitable status under the tax laws. As the majority of the High Court
said in Aid/Watch citing Lord Wilberforce in Scottish Burial Reform
and Cremation Society v. Glasgow City Corporation [1967] 3 All ER
215: ‘… the law of charity is a moving subject which has evolved to
accommodate new social needs as old ones become obsolete or
satisfied’.
2

Technical legal meaning of charitable
3
10. For a purpose to come within the technical legal meaning of
‘charitable’ it must be:
• within the spirit and intendment of the Statute of
Elizabeth, or deemed to be charitable by legislation
applying for that purpose (the charitable purpose
requirement); and
• for the public benefit, or deemed to be for the public
benefit by legislation applying for that purpose (the
public benefit requirement).
The technical legal meaning of charitable that is applied by Australian
courts is one that has been developed by the courts of Australia and
other countries with comparable jurisdictions. However, decisions
from other countries will only be relevant if they are consistent with
the approach of the Australian courts.

Charitable purposes – the spirit and intendment of the Statute of
Elizabeth
4
11. For a purpose to be within the spirit and intendment of the
Statute of Elizabeth it must be the same as, or analogous to,
purposes set out in the Preamble to that Statute, or purposes that the
courts have found to be charitable within the technical legal meaning.

1 Chesterman v. Federal Commissioner of Taxation (1925) 37 CLR 317; The
Incorporated Council of Law Reporting of the State of Queensland v. Federal
Commissioner of Taxation (1971) 125 CLR 659; 71 ATC 4206; (1971) 2 ATR 515;
Central Bayside General Practice Association Ltd v. Commissioner of State
Revenue (2006) 228 CLR 168 ; [2006] HCA 43 (Central Bayside).

2
Aid/Watch Incorporated v. FC of T [2010] HCA 42; 2010 ATC 20-227; 77 ATR 195
(Aid/Watch ) at paragraph 18.
3 See Explanation from paragraph 108 of this Ruling. 4 See Explanation from paragraph 112 of this Ruling.

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12. Charitable purposes are commonly grouped, following the
terminology used in The Commissioners for Special Purposes of
Income Tax v. Pemsel [1891] AC 531; [1891-1894] All ER Rep 28
(Pemsel ), as the ‘four heads of charity’:
• the relief of poverty;
• the advancement of education;
• the advancement of religion; and
• other purposes beneficial to the community.
Summaries of various court decisions on the four heads of charity are
in Appendix 2 to this Ruling, beginning at paragraph 315.

Deemed charitable purposes
5
13. Where State legislation extends charitable status to various
purposes, those purposes are not, as a result, also deemed to be
‘charitable’ for Commonwealth taxation purposes. Only
Commonwealth legislation that is intended to apply, and does apply,
for Commonwealth taxation purposes will have this effect.
14. The Extension of Charitable Purpose Act 2004 has deemed
the provision of child care services on a non-profit basis, and the
provision of a rental dwelling under the National Rental Affordability
Scheme by an entity that is endorsed as exempt from income tax,
6 to
be charitable purposes. 7

Public benefit
8
15. A purpose is for the public benefit if:
• it offers a benefit to the community that is real and of
value, either tangible or intangible; and
• that benefit is available to the public.
9
16. There is a rebuttable presumption of benefit to the community
where the purpose comes within the first three heads of charity.
Benefit to the community must be affirmatively established for
purposes within the fourth head.
10

5 See Explanation from paragraph 119 of this Ruling. 6 The provision of the rental dwelling has effect as a charitable purpose only during
the relevant incentive period (subsection 4A(2) Extension of Charitable Purpose Act
2004 ).
7 Sections 4 and 4A of the Extension of Charitable Purpose Act 2004. 8 See Explanation from paragraph 129 of this Ruling. 9 Downing v. Federal Commissioner of Taxation (1971) 125 CLR 185; 71 ATC 4164;
(1971) 2 ATR 472.
10 National Anti-Vivisection Society v. IRC [1948] AC 31

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17. The benefit of a charitable purpose does not have to be for
everyone in a community in order to satisfy the public element. It can
be for a section of the community, as long as that section is
appreciable.
11
18. The benefit of a charitable purpose does not have to satisfy
the public element where the charitable purpose is the relief of
poverty.
12
19. The notion of what is for the public benefit is not limited to a
closed or historical list. As needs are satisfied, new needs arise or
community views change, what constitutes a purpose that is for the
public benefit can change as well.

Deemed public benefit
13
20. The public benefit requirement is also satisfied if, under
Commonwealth legislation, an institution is deemed to have a
purpose that is for the public benefit.
21. Commonwealth legislation has deemed the purpose of the
following institutions to be for the public benefit:
• closed or contemplative religious orders that regularly
undertake prayerful intervention at the request of
members of the public; and
• open and non-discriminatory self-help groups.
14
22. An institution will not be a charitable institution simply because
Commonwealth legislation deems it to have a purpose that is for the
public benefit. The institution still has to be able to show that its
purpose, determined by reference to relevant features and
circumstances (see paragraphs 30 – 32 of this Ruling) is charitable in
the technical legal meaning.

Charitable institution or fund
15
23. Tax law distinguishes between charitable institutions and
charitable funds. Whether a charity has the character of an institution
or a fund is a question of fact, and regard must be had to the whole of
the circumstances at the relevant time.

11 See Kenny J in Commissioner of Taxation v. The Triton Foundation (2005) 147
FCR 362; [2005] FCA 1319 at paragraph 22: ‘The public may, however, include a
section of the public’.
12 Dingle v. Turner [1972] AC 601; [1972] 1 All ER 878. 13 See Explanation from paragraph 150 of this Ruling. 14 Section 5 of the Extension of Charitable Purpose Act 2004 . 15 See Explanation from paragraph 163 of this Ruling.

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Charitable institution 16
24. An institution is an establishment, organisation or association,
instituted for the promotion of an object, especially one of public or
general utility.
17 It connotes a body called into existence to translate a
defined purpose into a living and active principle. It may be
constituted in different ways including as a corporation,
unincorporated association or trust. However it involves more than
mere incorporation. A structure with a small and exclusive
membership that is controlled and operated by family members and
friends and undertakes limited activities is not an institution.
18
25. Trustees whose only function is the management of a trust
fund consistent with the terms of a trust deed will not qualify as a
charitable institution.
19 Some additional quality or function that gives
the trust, when regarded as a whole, the character of an
establishment, organisation or association instituted for the promotion
of an object is required – for example, the carrying on of activities or
the provision of services relevant to the charitable purpose.
20
However, a trust that does not qualify as an institution could still
satisfy the requirements for a charitable fund.

Charitable purpose
21
26. An institution is charitable if:
• its only, or its ‘main or predominant or dominant’
purpose is charitable in the technical legal meaning;
22
and
• it was established and is maintained for that charitable
purpose.
23
In this Ruling, we typically refer to the required purpose as the ‘sole
purpose’ of the institution because a charitable institution cannot have
an independent non-charitable purpose (regardless of how minor that
independent non-charitable purpose may be).
24

16 See Explanation from paragraph 165 of this Ruling. 17 Stratton v. Simpson (1970) 125 CLR 138 at 157-158. 18 See Pamas Foundation (Inc) v. Commissioner of Taxation (1992) 35 FCR 117; 92
ATC 4161; (1992) 23 ATR 189.
19 See Commissioner of Land Tax for the State of New South Wales v. Joyce & Ors
(1974) 132 CLR 22; (1974) 5 ATR 32 ; Stratton v. Simpson (1970) 125 CLR 138.
20 Trustees of the Indigenous Barristers’ Tr ust v. Federal Commissioner of Taxation
(2002) 127 FCR 63; [2002] FCA 1474 at paragraph 31.
21 See Explanation from paragraph 173 of this Ruling. 22 See Federal Commissioner of Taxation v. Word Investments Limited (2008) 236
CLR 204; [2008] HCA 55 (Word Investments) at paragraph 17; Congregational
Union of New South Wales v. Thistlethwayte (1952) 87 CLR 375 at paragraph 19.
23 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 34. 24 Stratton v. Simpson (1970) 125 CLR 138.

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‘Main or predominant or dominant’ purpose 25
27. A purpose is the ‘main or predominant or dominant’ purpose
of an institution if any other purpose the institution has is no more
than incidental or ancillary to that purpose.
26
‘Incidental or ancillary’ purpose
27
28. A purpose is incidental or ancillary
28 to a charitable purpose if
it tends to assist, or naturally goes with, the achievement of the
charitable purpose. It does not mean a purpose that is minor in
quantitative terms.
29

Independent purpose
29. A purpose is independent rather than incidental or ancillary if it
is an end in itself, or of substance in its own right or is not intended to
further a charitable purpose.

Finding purpose
30
30. The enquiry as to purpose is a holistic one. It is the substance
and reality of the institution’s purpose that must be determined.
31. The objects or objectives in the constituent documents of an
institution, and the activities by which those objects or objectives are
achieved, are the main factors to be considered in determining the
purpose of the institution.

25 See Explanation from paragraph 177 of this Ruling. 26 See Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 17;
Stratton v. Simpson (1970) 125 CLR 138 at 159.
27 See Explanation from paragraph 180 of this Ruling. 28 The terms ‘subsidiary’, ‘subordinate’ and ‘concomitant’ are sometimes used in
place of ‘incidental or ancillary’ – see, for example, Congregational Union of New
South Wales v. Thistlethwayte (1952) 87 CLR 375 and Royal Australasian College
of Surgeons v. Federal Commissioner of Taxation (1943) 68 CLR 436 ; (1943) 7
ATD 289 .
29 Navy Health Limited v. Federal Commissioner of Taxation (2007) 163 FCR 1;
[2007] FCA 931 at paragraph 65.
30 See Explanation from paragraph 186 of this Ruling.

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32. If the objects or objectives in the constituent documents of an
institution indicate it has a sole 31 purpose which is charitable, but its
activities and other relevant factors indicate the substance and reality
is to the contrary, the institution will not be charitable. Other relevant
factors can include:
32
• other elements in the constituent documents of the
institution such as its powers, rules, not for profit and
winding up clauses, and clauses governing who can
benefit from the institution’s activities and in what
ways;
• how the institution is operated;
• any legislation governing its operation;
• the circumstances in which it was formed;
• its history; and
• its control.
33. Where the constituent documents of an institution indicate it
has been established solely for a charitable purpose, it can be
charitable even if its activities are not intrinsically charitable. In these
circumstances, the enquiry centres on whether it can be said that the
activities are carried on in furtherance of the institution’s charitable
purpose.
33
34. If the constituent documents of an institution indicate it does
not have a sole
34 purpose which is charitable:
• it cannot be charitable even if some or all of its
activities are charitable in nature;
• it is not charitable simply because it uses means that
are commonly used by charities, for example
educational means; and
• the fact that charitable consequences may result from
its activities does not mean that it is charitable. For
example, an institution cannot be characterised as
charitable simply because it provides financial or other
support to a charity.

31 See paragraph 5 of this Ruling. 32 See, for example, Tasmanian Electronic Commerce Centre Pty Ltd v.
Commissioner of Taxation (2005) 142 FCR 371; [2005] FCA 439 and
Commissioner of Taxation v. The Triton Foundation (2005) 147 FCR 362; [2005] FCA 1319 at paragraph 20.
33 Word Investments (2008) 236 CLR 204; [2008] HCA 55; Royal Australasian
College of Surgeons v. Federal Commissioner of Taxation (1943) 68 CLR 436 ;
(1943) 7 ATD 289 .
34 See paragraph 5 of this Ruling.

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35. Objects in the constituent documents of an organisation will
be accepted as powers rather than objects where, in the context of
the constituent documents as a whole, it is clear they were intended
to be no more than powers to give effect to the purpose of the
organisation. Whether items referred to as objects in the constituent
documents of an organisation are truly objects or simply powers is a
question of fact.
35
36. Where charities establish a peak or similar body to further
their common charitable endeavours, the same principles and
considerations apply in determining the purpose of that body as
would apply to any entity.
37. In characterising an instituti on, consideration has to be given
not only to the purpose for which it was established, but also the
purpose for which it continues to be conducted.
36

Profit making
38. A charitable institution that endeavours to make a profit from
its activities can still be charitable if its profit making goal is only in aid
of its charitable purpose.
37

Power to accumulate
38
39. An institution with a power to accumulate profits can still be
charitable, as long as the profits are being accumulated in order to
augment the funds available to effect the institution’s charitable
purpose.
40. However, an institution that accumulates most of its profits
over a number of years will need to be able to show that this
accumulation is still consistent with it having a charitable purpose.
Considerations that can influence whether such an institution
continues to have a charitable purpose include whether funds that are
to be applied to its charitable purpose have been identified, and if so
when and how they are to be applied.
39

Charitable fund
40
41. The words ‘fund’ and ‘charitable fund’ are not statutorily
defined for the purposes of the tax law, so they take their ordinary
meaning.

35 See Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraphs 20-24. 36 See Cronulla Sutherland Leagues Club Li mited v. Commissioner of Taxation
(1990) 23 FCR 82 at 95; 90 ATC 4215 at 4225; (1990) 21 ATR 300 at 312;
Commissioner of Taxation v. The Triton Foundation (2005) 147 FCR 362; [2005] FCA 1319; Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph
34.
37 See eg Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 24 . 38 See Explanation from paragraph 220 of this Ruling. 39 See Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 22. 40 See Explanation from paragraph 224 of this Ruling.

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42. A charitable fund is a fund established for public charitable
purposes by will or instrument of trust.
43. The charitable purposes must be the only purposes for which
the fund is established. If a fund can be applied for purposes that are
not charitable it is not a charitable fund.
41 Any objects which, if
viewed in isolation, would not be charitable, can only be incidental or
ancillary to the charitable purposes.

44. The purpose of a fund is found by reference to the terms of its
constituent documents (primarily the instrument of trust or the will)
and any relevant legislation.
45. The activities carried on by the trustees subsequent to
establishment are not relevant to whether a fund has a charitable
purpose. However, they are relevant to income tax exemption. For
income tax exemption, a fund must be applied for the purposes for
which it was established.
42

Purposes which are not charitable
43
46. Purposes will not be charitable if they lack the required public
benefit or are not within the spirit and intendment of the Statute of
Elizabeth. The following paragraphs identify purposes that are not
charitable. Whether or not the purposes of a particular entity are
charitable can only be determined on a case by case basis, taking
into account the facts and circumstances of the entity.

The purpose is to confer private benefits
Distributions to owners or members
44
47. An institution that carries out its activities for the private profit
or benefit of its owners or members is not charitable as it cannot
satisfy the public benefit requirement. This will be the case even if
charitable consequences flow from the institution’s activities, or the
motivation of the institution has some social value.
48. However, where the objects of an institution are charitable, the
fact that it can distribute surpluses to its owners or members in
furtherance of those objects does not as a matter of course preclude
the institution from satisfying the public benefit requirement. An
institution that can distribute surpluses to its owners or members can
still satisfy the public benefit requirement if:
• its sole
45 purpose is charitable;
41 Compton and Ors v. Federal Commissioner of Taxation (1966) 116 CLR 233 at
248.
42 Douglas and Ors v. Federal Commissioner of Taxation (1997) 77 FCR 112 at 119;
97 ATC 4722 at 4727; (1997) 36 ATR 532 at 538; Taxation Ruling TR 2000/11
Income tax: endorsement of in come tax exempt charities.
43 See Explanation from paragraph 231 of this Ruling. 44 See Explanation from paragraph 233 of this Ruling. 45 See paragraph 5 of this Ruling.

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• its constituent documents allow it to distribute its
surplus or profit to another entity or entities in order to
effect that sole
46 charitable purpose; and
• the owners or members who can receive distributions
(in accordance with the terms of the constituent
documents) are themselves charitable entities that
have a similar charitable purpose to the institution
itself.
47
In these circumstances, a distribution of surplus to the owners or
members of the institution would not result in a private benefit to
them.

Benefits for members
48
49. An institution set up to advance the interests of its members in
their capacity as members cannot be charitable as it cannot satisfy
the public benefit requirement. The members of such institutions do
not, as members, constitute a section of the public in the relevant
sense, and the benefits derived by the members are, as a result,
private in nature.
50. However, an institution that benefits its members can still be
charitable if:
• the member benefits are simply incidental or ancillary
to the purpose of benefiting the community;
49 or
• the institution is an open and non-discriminatory
self-help group that is deemed to have a purpose that
is for the public benefit under the Extension of
Charitable Purpose Act 2004.
50
51. Where the purpose of an institution is for the benefit of the
community, placing limits on the membership will not preclude a
finding that its purpose is charitable.
52. Where an institution that is set up to advance its members’
interests establishes a separate entity to carry out charitable activities
that separate entity can still be charitable. It is the separate entity that
must be for the public benefit. The fact it is established and controlled
by the members’ institution does not prevent it from being
charitable.
51

46 See paragraph 5 of this Ruling. 47 Word Investments (2008) 236 CLR 204; [2008] HCA 55. 48 See Explanation from paragraph 245 of this Ruling. 49 Victorian Women Lawyers’ Association Inc v. Federal Commissioner of Taxation
(2008) 170 FCR 318; [2008] FCA 983.
50 Section 5 of the Extension of Charitable Purpose Act 2004. 51 See Explanation from paragraph 248 of this Ruling.

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Benefits for individual entities that may not be members of an
organisation 52
53. Community and economic development, and the
advancement of industry, commerce or agriculture can be charitable
purposes, but the benefits that are conferred must be for the public
benefit and within the spirit and intendment of the Statute of
Elizabeth.
54. An institution that simply provides benefits to customers,
contributors or subscribers in return for payment lacks the necessary
public character.

Incidental or ancillary private benefits
53
55. The existence of private benefits that are merely incidental or
ancillary to a public benefit will not by itself affect the classification of
a purpose as charitable.

The purpose is social, recreational or sporting
54
56. A purpose that is social in nature is not charitable, even if
motivated by charitable sentiments or results in a benefit to the
community.
57. Recreational or sporting purposes are also not charitable,
regardless of motivation or the benefits to the community that can
result.
58. However, social, recreational or sporting purposes and
activities that are merely incidental to a purpose that is charitable do
not by themselves prevent that purpose being charitable.

The purpose is illegal
55
59. Purposes that are illegal are not charitable.

The purpose is commercial
56
60. A purpose of carrying on a business or commercial enterprise
to generate a surplus where that purpose is an end in itself is not
charitable.

52 See Explanation from paragraph 251 of this Ruling. 53 See Explanation from paragraph 258 of this Ruling. 54 See Explanation from paragraph 262 of this Ruling. 55 See Explanation from paragraph 269 of this Ruling. 56 See Explanation from paragraph 271 of this Ruling.

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61. However, commercial or business-like activities can be
compatible with a charitable purpose. An institution undertaking
commercial or business-like activities can be charitable if:
• its sole
57 purpose is charitable and it carries on a
business or commercial enterprise to give effect to that
charitable purpose. In these circumstances it does not
matter that the activities themselves are not intrinsically
charitable;
58
• the sole
59 purpose of the institution is charitable and
the commercial activities directly carry out the
charitable purpose;
• it has a business or commercial purpose that is simply
incidental or ancillary to its charitable purpose; or
• its activities are intrinsically charitable but they are
carried on in a commercial or business-like way.
62. An institution in these circumstances can hold passive
investments to receive a market return to further its charitable
purpose, or to meet reasonable operational expenses, without
undermining its charitable status.
63. An institution carrying on a business or commercial enterprise
will not be charitable simply because it is controlled by another
institution that is charitable. It is the purpose of the entity itself which
must be charitable.

The purpose is governmental
60
64. The purposes of government in carrying out its functions and
activities are not charitable.
65. This does not mean that an institution cannot be charitable if
in carrying out its purpose it has the effect of helping to achieve
government policy. As long as the institution independently carries
out its purpose, it can still be charitable.
61
66. Government funding of an institution does not mean the
institution cannot be charitable. If the sole
62 purpose of the institution
is charitable, the fact that it is substantially funded by government will
not affect its characterisation as a charitable institution.
63

57 See paragraph 5 of this Ruling. 58 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 26. 59 See paragraph 5 of this Ruling. 60 See Explanation from paragraph 278 of this Ruling. 61 See Central Bayside (2006) 228 CLR 168 ; [2006] HCA 43 at paragraph 40 . 62 See paragraph 5 of this Ruling. 63 See Central Bayside (2006) 228 CLR 168 ; [2006] HCA 43 at paragraph 39 .

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67. However, if an institution is funded by government in order to
give effect to government policy, and carries out its functions in order
to discharge a responsibility of government, its sole
64 purpose will not
be charitable.

The purpose is vague, has insufficient value or is of
indeterminable value for the community
65
68. A purpose that is vague or ambiguous cannot be
characterised as a charitable purpose.
69. A purpose is not charitable if the value or benefit of the
purpose cannot be clearly identified or is insufficient.
66

Purposes which may be charitable in certain circumstances
Political purposes
67
70. There is no general doctrine in Australia which excludes a
charity from having political purposes.
68
71. Following the High Court’s decision in Aid/Watch :
• an entity can be charitable if it has a purpose (including
a sole
69 purpose) of generating public debate with a
view to influencing legislation, government activities or
government policy in relation to subject matters that
come within one or more of the four heads of charity,
as long as the means used and the ends to be
achieved are not inconsistent with the rule of law and
the established system of government;
• whether generating public debate to influence legislation,
government activities or government policy can be a
charitable purpose under the fourth head where the subject
matter lies beyond existing heads of charity will be decided
on a case by case basis. Arguably, all government activity
or policy is intended to be ‘beneficial to the community’ but
this does not mean generating public debate about any
government activity or policy will be charitable. The subject
matter to which the debate is directed will still need to either
come within the spirit and intendment of the Preamble to
the Statute of Elizabeth (and this is usually established by
analogy to existing charitable purposes) or be deemed
charitable by legislation applying for that purpose (see
paragraph 10 of this Ruling).

64 See paragraph 5 of this Ruling. 65 See Explanation from paragraph 288 of this Ruling. 66 However, there is a rebuttable presumpt ion of benefit to the community where the
purpose comes within the first three heads of charity – see Explanation at
paragraph 131 of this Ruling.
67 See Explanation from paragraph 294 of this Ruling. 68 Aid/Watch 2010 ATC 20-227; 77 ATR 195; [2010] HCA 42 at paragraph 48. 69 See paragraph 5 of this Ruling.

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However, it is expected that the subject matter of many
areas of government activity or policy would fall under one
of the first three heads of charity or the already established
charitable purposes under the fourth head, and where they
do, a purpose of generating public debate about that
activity or policy will be charitable. Examples of purposes
that have been held to be charitable under one of the four
heads of charity are in Appendix 2 from paragraph 315 of
this Ruling; and
• an entity does not necessarily have to present a
balanced position in order to be considered an entity
with a purpose of generating public debate: it could
express a singular point of view about a subject matter
that comes within one of the four heads of charity.
72. Political parties are not charitable. A sole
70 purpose of
engaging in activities associated with political parties is not charitable.
73. However, if the purpose of an organisation is otherwise
charitable, its status will not be affected by non-charitable political
activities that are simply a means of effecting its sole
71 charitable
purpose. These activities could include seeking to persuade members
of the public to vote for or against particular candidates or parties in
an election, or distributing material designed to underpin a party
political campaign.

Examples
74. Each of the examples below addresses the application of
particular principles in determining whether an entity is a charitable
institution for the purposes of income tax exemption. However, it is
important to note that in order to qualify for any of the tax concessions
that are available to charitable institutions, the institution must also be
endorsed under the relevant endorsem ent provisions (for example a
charitable institution seeking income tax exemption must be endorsed
as exempt from tax under Subdivision 50-B of the ITAA 1997). The
endorsement provisions are not cons idered in the examples or the
Ruling.

70 See paragraph 5 of this Ruling. 71 See paragraph 5 of this Ruling.

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Example 1 – Institution
75. Ex Trust is established to acquire and maintain a hall for the
purpose of leasing it to various religious organisations within the
community. To this end, a hall is acquired by the trustees of Ex Trust
and let at commercial rates. The trustees themselves manage the
property, and as part of this function they do minor repair work on the
hall, prepare books of account, and organise hiring of the hall. They
claim exemption from income tax for the trust on the basis that the
trust is a charitable institution.
76. The trust is not an institution. The only function of the trustees
is to acquire and manage the hall in accordance with the terms of the
trust deed – they have no other role. The fact that the organisations
that hire the hall are religious organisations does not alter this
outcome: Ex Trust is not involved in the operation of these
organisations, but simply provides a facility that they can use. As Ex
Trust is not an institution, it cannot be a ‘charitable institution’.

Example 2 – Purposes beneficial to the community
77. Women Engineers is a not for profit organisation with objects
that provide for the development, advancement and promotion of
women in various fields of engineering. The organisation also seeks
to address the disadvantages experienced by women in engineering.
Whilst membership of the organisation is limited to tertiary qualified
women engineers, the purpose of advancing women in engineering is
a purpose that is beneficial to the community as it is aligned to current
social norms aimed at eliminating gender discrimination (as
evidenced by anti-discrimination legislation) and is charitable in the
technical legal meaning.

Example 3 – Incidental or ancillary to a charitable purpose
78. Women Engineers (as in Example 2) also has in its objects
the provision of a professional and social network for women
engineers. In furtherance of this object, Women Engineers holds
several social functions during the year that enable its members to
network and meet with corporate leaders in various fields of
engineering invited to those functions.
79. Whilst these social functions benefit the members of Women
Engineers, these benefits are considered incidental or ancillary to its
charitable purpose. These particular social functions are in aid of, or
furtherance of its charitable purpose of advancing and promoting
women engineers in various fields of engineering and so Women
Engineers has a charitable purpose.

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Example 4 – Independent non-charitable purposes – not
incidental or ancillary to a charitable purpose
80. B Insured Ltd is a not for profit company limited by guarantee.
Its object is the provision of health insurance services at a discounted
family rate to current serving members of the Australian Defence
Forces (ADF), recognising that the health care of active members of
the ADF are provided by the ADF. B Insured Ltd can also offer health
insurance services to the general public at market rates. It has
actively sought business from the general public and it has
established a market share.
81. The purpose of providing health insurance services at the
discounted family rate to current serving members of the ADF is
beneficial to the community. This is on the basis that this object, by
providing aid, comfort and encouragement to serving members and
their families by relieving them of the concerns of extensive medical
costs, benefits the safety and security of the country by promoting the
efficiency of the ADF, and therefore is charitable in its technical legal
sense. However, the provision of insurance services more generally
and for a fee will not be beneficial to the community and therefore will
not be charitable.
82. In this instance, B Insured Ltd’s provision of insurance
services generally is an independent non-charitable purpose which is
not incidental or ancillary to its charitable purpose.

Example 5 – Commercial activities in furtherance of a charitable
purpose
83. S Enterprises Ltd has a purpose of encouraging the Christian
faith by promoting or conducting evangelistic services and other
religious gatherings, bible study for children and the production and
distribution of evangelistic literature. S Enterprises Ltd itself does not
undertake any of these activities. Instead, its objects state it is to
carry on a commercial activity (selling musical instruments and
recordings) to generate funds for S Campaigners, an unincorporated
association that is an endorsed charity established for the
advancement of religion. S Campaigners conducts religious services
and other religious events.
84. The fact that S Enterprises Ltd raises funds by commercial
means will not detract from it being considered a charitable institution.
Its commercial activity is merely a means to give effect to its
charitable purpose.

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Example 6 – Commercial activities not in furtherance of a
charitable purpose
85. Catering Pty Ltd is a catering company established for the
profit of its shareholders. It is contracted by various charities at
market rates to supply hot meals to the clients of those charities,
being the disadvantaged and homeless in a particular region. Whilst
the activities undertaken by Catering Pty Ltd are similar to those of a
charity, its activities are carried on to generate a profit for
shareholders and are not in furtherance of a charitable purpose.

Example 7- Accumulation of profits consistent with charitable
purpose
86. S Enterprises Ltd’s (as in Example 5) constitution contains a
clause enabling its directors to reserve profits in order to maintain the
company’s property, to meet contingencies or for any other reason
consistent with its charitable purpose. S Enterprises Ltd retains all of
its profits for several years to finance an evangelical event which is
scheduled to be held at the end of that period of accumulation.
87. The accumulation of profits by S Enterprises Ltd to finance the
scheduled evangelical event is consistent with its charitable purpose
of encouraging the Christian faith.

Example 8 – Accumulation of profits not consistent with
charitable purpose
88. AAA Ltd’s constituent documents indicate its purpose is the
relief of poverty in Australia. They also contain a power enabling the
company to retain profits. AAA Ltd operates retail food stores so that
any profit made can be paid to charitable institutions. After several
years whilst the stores have made profits, no funds have been
transferred to any charitable institution and all profits have been
retained. Minutes of Directors meetings of AAA Ltd for the relevant
year indicate that profits are to be retained for expansion of the stores
for at least a few more years and no plans have been made for any
transfer of funds to be used for charitable purposes. In these
circumstances the accumulation of profits is not consistent with
charitable purposes in the relevant year.

Example 9 – Surplus from commercial activities with surplus
paid to member that is an endorsed charitable institution
89. Q Limited is an institution that has as its purpose the
advancement of the welfare of vision impaired young adults. Its
objects include operating a transport service for the general public to
raise funds for Q Vision Impaired Association (an endorsed charitable
institution). Q Vision Impaired Association is the sole member of Q
Limited and the constitution of Q Limited provides that no other
members can be added.

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90. Q Limited is being operated for the charitable purpose of
advancing the welfare of vision impaired adults. Its charitable status
does not change because it pays its surplus to Q Vision Impaired
Association.

Example 10 – Governmental purposes – not charitable purpose
91. The constituent documents of Outback Foundation (Outback)
state that its object is to provide specialist medical assistance to
improve health care in regional Australia.
92. In line with a new government initiative aimed at improving
regional health, the government entered into agreements to provide
funding to Outback and other similar organisations, in addition to
building up existing public facilities. As part of its agreement, Outback
and other funding recipients must report periodically to the
government for general governance purposes, as required in other
government grant situations.
93. The provision of funding by the government enables Outback
to advance its purpose of improving regional health care. Neither the
periodical reporting requirements, nor the fact that Outback’s purpose
is shared by the government, mean that Outback is carrying out its
activities on behalf of the government. Outback is still independently
carrying out its own object. Outback’s existing charitable purpose of
improving regional health care did not change into a governmental
purpose when the government dev eloped and implemented its new
initiative.

Example 11 – Generating public debate – not charitable purpose
94. Sports for All Incorporated (SFA Inc) has been established to
promote the aim of obtaining more funding for professional sport so
as to ensure that Australia is a leading force in international sporting
competition. SFA Inc researches the effect of government funding
programs on sporting achievements, publicises its reports and lobbies
government. Although SFA Inc is generating public debate in the
sense referred to in Aid/Watch it is not in relation to a subject matter
which comes within one of the four heads of charity and therefore is
not charitable in the technical legal meaning .

Example 12 – Generating public debate – charitable purpose
95. CC is a not for profit environmental organisation. It has an
advocacy and campaigning focus. Its constituent documents state its
objects are:
• to advocate and publicly campaign for policy changes
and actions to minimise global warming; and

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• to engage with and inform policy makers and the
community about the risks to human health from
climate change and the solutions available to reduce
risks.
96. The organisation carries out a range of activities to support
the achievement of its objects. Its main and continuing activities are
gathering evidence to develop policy papers and submissions,
commissioning and publishing research, analysing the climate
change policies of political parties, meeting with Members of
Parliament and government officials with a view to influencing their
position on climate change, publicly commenting on climate change
issues, and commenting on, and issuing media releases in relation to,
government environmental policie s and legislative proposals.
97. The organisation raises awareness, campaigns and
advocates for action in relation to a significant environmental issue.
The purpose of the organisation is charitable under the fourth head of
charity. The organisation is generating public debate about a subject
matter that comes within one of the four heads of charity.

Example 13 – Advocacy organisation – not charitable purpose
98. B Australia is a not for profit community advocacy
organisation. Its constituent documents state its purpose is to review,
comment on and campaign in relation to the policies of political
parties in Australia. Its objects state that its aim is to allow the
average Australian to ‘have a voice in the democratic process’. Issues
are selected on the basis of what is topical, and what its members
consider appropriate.
99. Some of the issues the organisation campaigns on may be
subject matters that come within one of the four heads of charity but
the organisation does not restrict itself to these types of issues. The
organisation’s activities are directed to a purpose which itself is too
broad to come under any of the four heads of charity.

Example 14 – Advocacy – not charitable purpose
100. B Association is an organisation formed to oppose a proposed
toll for a new freeway. Its constituent documents state that its only
object is to publicly campaign for no toll on the freeway. This is to be
achieved by lobbying politicians, releasing statements to the media,
and conducting public discussion sessions to explain its opposition.
101. The Association is not charitable. In this case, the fact that it
exists to advocate is not in itself the disentitling factor. Rather, it is the
fact that the advocacy the organisation undertakes is not in relation to
a subject matter that is itself charitable.

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Example 15 – Trust funding advocacy activities or projects –
charitable purpose
102. Benevolent Foundation is a trust established to support
charitable institutions and charitable funds involved in the relief of
poverty. Its trust deed specifically provides that it can fund advocacy
activities or advocacy projects, including the promotion of law reform
or government policy development, but only where the activities or
projects are directly related to achieving the receiving charity’s
purpose.
103. The Foundation is charitable. The funding of the advocacy
activities is still consistent with the Foundation’s charitable purpose of
relieving poverty.

Date of effect
104. This Ruling applies to years of income commencing both
before and after its date of issue. However, this Ruling will not apply
to taxpayers to the extent that it conflicts with the terms of a
settlement of a dispute agreed to before the date of issue of this
Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10).

Commissioner of Taxation
12 October 2011

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Appendix 1 – Explanation
This Appendix is provided as information to help you
understand how the Commissioner’s view has been reached. It does
not form part of the binding public ruling.
105. The terms ‘charity’ and ‘charitable’ are used in various
contexts in both the ITAA 1997 and the FBTAA. Sections 50-1 and
50-5 of the ITAA 1997 exempt from income tax the ordinary and
statutory income of funds established for public charitable purposes
by will or instrument of trust and charitable institutions.
72 For fringe
benefits tax purposes, subsection 57A(5) of the FBTAA provides an
exemption for health promotion charities, and section 65J of the
FBTAA grants a rebate of tax to a charitable institution. In addition,
gift deductibility under Division 30 of the ITAA 1997 is provided in
respect of various charities.
106. However, neither the ITAA 1936, the ITAA 1997 nor the
FBTAA define these terms.
107. In the absence of a definition of ‘charitable’ in the legislation,
the courts have periodically confirmed that it bears its technical legal
meaning, rather than its ordinary or popular meaning, unless the
context indicates otherwise. For example, in Central Bayside Gleeson
CJ, Heydon and Crennan JJ said there is a general rule that, when
used in a statute, the word ‘charitable’ bears its technical legal
meaning unless otherwise indicated, and that:
The general rule just mentioned has been accepted as the law in this
country at least since the decision of the Privy Council in
Chesterman v. Federal Commissioner of Taxation (1925) 37 CLR
317; [1926] AC 128; (1925) 32 ALR 9.
73
72 Although the term ‘public charitable purpose s’ is used in section 50-5 of the ITAA
1997 with respect to funds, the phrase is synonymous with ‘charitable purposes’
and requires the same element of public benefit ( Ashfield Municipal Council v.
Joyce and Ors (1977) 51 ALJR 117 at 121-122; Douglas and Ors v. Federal
Commissioner of Taxation (1997) 77 FCR 112 at 124; 97 ATC 4722 at 4731;
(1997) 36 ATR 532 at 542).
73 Central Bayside (2006) 228 CLR 168 ; [2006] HCA 43 at CLR 178 footnote 28;
HCA paragraph 18 footnote 6.

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Guide
This Explanation covers:
The Technical legal meaning of charitable from paragraph 108
Charitable institution or fund from paragraph 163
Charitable institution from paragraph 165
Charitable fund from paragraph 224
Purposes which are not charitable

The purpose is to confer private benefits from paragraph 231

The purpose is social, recreational or sporting from paragraph 262

The purpose is illegal from paragraph 269

The purpose is commercial from paragraph 271

The purpose is governmental from paragraph 278
The purpose is vague, has insufficient value or
is of indeterminable value for the community from paragraph 288
Purposes which may be charitable in certain circumstances
Political purposes
from paragraph 294

Technical legal meaning of charitable
108. The ordinary meaning of charitable is the relief of poverty.
74
109. The technical legal meaning of charitable is as defined in the
statement of categories of charity in Pemsel ‘by reference to the spirit
and intendment of the Preamble to the Statute of Charitable Uses
1601 (Statute of Elizabeth)’.
75 This is broader than the ordinary
meaning.
110. The technical legal meaning of charitable that is applied by
Australian courts is one that has been developed by the courts of
Australia and other countries with comparable jurisdictions. However,
in Word Investments the High Court noted that the ‘primary relevant
line of authority’ is that which is concerned with paragraph 23(e) of
the ITAA 1936, the predecessor to sections 50-5, 50-50 and 50-110
of the ITAA 1997.
76
111. A purpose will come within the scope of the technical legal
meaning of charitable if it is:
• within the spirit and intendment of the Preamble to the
Statute of Elizabeth, or deemed to be charitable by
legislation applying for that purpose (the charitable
purpose requirement); and

74 See Chesterman v. Federal Commissioner of Taxation (1925) 37 CLR 317. 75 See Central Bayside (2006) 228 CLR 168 ; [2006] HCA 43 at CLR 178 footnote 28;
HCA paragraph 18 footnote 6.
76 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 17.

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• for the public benefit, or deemed to be for the public
benefit by legislation applying for that purpose (the
public benefit requirement).
77

Charitable purposes – the spirit and intendment of the Statute of
Elizabeth
112. While it is necessary that a charitable purpose is of benefit or
value, not every benefit or value can support the finding of a
charitable purpose. That is, not every purpose that is of benefit to the
community is necessarily charitable.
78
113. To be charitable, a purpose must be within the ‘spirit and
intendment’ of the Preamble to the Statute of Charitable Uses 1601
(the ‘Statute of Elizabeth’).
79 This means that the purpose must be
the same as or analogous to:
•
purposes set out in the Preamble to that Statute; or
• purposes that the courts have found to satisfy the
technical legal meaning of charitable.
114. The purposes in the Preamble to the Statute of Elizabeth are
the relief of aged, impotent and poor people; the maintenance of sick
and maimed soldiers and mariners, schools of learning, free schools
and scholars in universities; the repair of bridges, ports, havens,
causeways, churches, sea banks and highways; the education and
preferment of orphans; the relief, stock or maintenance of houses of
correction; marriage of poor maids; supportation, aid and help of
young tradesmen, handicraftsmen and persons decayed; the relief or
redemption of prisoners or captives and the aid or ease of inhabitants
concerning payment of fifteens, setting out of soldiers, and other
taxes.
115. These charitable purposes are commonly grouped, following
the terminology used in Pemsel ,
80 as the ‘four heads of charity’ being:
• the relief of poverty;
• the advancement of education;
• the advancement of religion; and
• other purposes beneficial to the community.
77 The Royal National Agricultural and Industrial Association v. Chester and Ors
(1974) 48 ALJR 304; Commissioner of Taxation v. The Triton Foundation (2005)
147 FCR 362; [2005] FCA 1319.
78 The Royal National Agricultural and I ndustrial Association v. Chester and Ors
(1974) 48 ALJR 304; The Incorporated Council of Law Reporting of the State of
Queensland v. Federal Commissioner of Taxation (1971) 125 CLR 659; 71 ATC
4206; (1971) 2 ATR 515.
79 The Royal National Agricultural and Industrial Association v. Chester and Ors
(1974) 48 ALJR 304 at 305-306 .
80 The Commissioners for Special Purposes of the Income Tax v. Pemsel [1891] AC
531; [1891-4] All ER Rep 28.

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116. If a purpose is not within the purposes set out in the Preamble
to the Statute of Elizabeth or the purposes the courts have found to
satisfy the technical legal meaning of charitable, the purpose must be
reasonably analogous to or an extension of a purpose that has been
found to be charitable.
81 That does not involve mechanical application
of decided cases. It can involve a combination of:
• similarities or differences with purposes in the
Preamble or court decisions, including the
development of judicial approaches in those decisions;
• those purposes in light of changes in society and
circumstances, including movement in the law,
attitudes and community consensus;
• the importance of the benefit or value for society, and
how it sustains or enhances society; and
• the ways charitable purposes are related to the
benefits and values they intend.
117. An illustration of how the courts have drawn analogies is
shown by the decision in Scottish Burial Reform and Cremation
Society Ltd v. Glasgow City Corporation [1967] 3 All ER 215. The
case concerned a non-profit making company whose sole
82 purpose
was the carrying out of cremation by operating a crematorium. It was
held by the House of Lords to be a society established for charitable
purposes. The court came to this conclusion by analysing decided
cases which had used the ‘repair of churches’ mentioned in the
Preamble to decide that the maintenance of burial grounds in a
church was charitable and that the maintenance of a cemetery
extended from a churchyard was charitable. By what was considered
to be a reasonable extension or analogy with these cases it was held
that the company’s purposes were charitable as they, too, were
concerned with the disposal of the dead. The court also considered
the necessity of disposal of the dead as evidenced by laws of
Parliament.

81 See for example the discussion in Commissioner of Taxation v. The Triton
Foundation (2005) 147 FCR 362; [2005] FC A 1319 at paragraphs 32 and 33, and
in Victorian Women Lawyers (2008) 170 FCR 318; [2008] FCA 983 at paragraphs
147 and 148.
82 See paragraph 5 of this Ruling.

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118. However, it is not appropriate to use fanciful or unreal
comparisons with decided cases or the Preamble to the Statute of
Elizabeth. For example, in Rex v. The Special Commissioners of
Income Tax; (ex parte The Headmasters’ Conference); Rex v. The
Special Commissioners of Income Tax (ex parte the Incorporated
Association of Preparatory Schools) (1925) 10 TC 73, the
Headmasters’ Conference failed in its argument that its purposes
were related to education and that, therefore, it was charitable. The
court found its purpose included protecting and improving the status,
character and interests of persons engaged in the profession of
education. Lord Hewart CJ (the other members of the court delivering
concurring judgments) said at 85:
The argument if I follow it … seems to be something like this:
Education in some of its aspect s is a charity; headmasters are
connected with education; the Headmasters’ Conference is
connected with headmasters; therefore the Headmasters’
Conference is a charity. It is really a very old friend: some soldiers
have red hair; this man has red hair; therefore this man is a soldier.
In like manner it might be argued and with equal force a charity is for
the good of mankind; all lawful trades and professions are for the
good of mankind; therefore all lawf ul trades and professions are
charities; and in that way – quite a pleasant way – the Income Tax
under Schedule D might be abolished universally.

Deemed charitable purposes
119. State legislation that extends charitable status to various
purposes does not affect the meaning of ‘charitable’ for
Commonwealth taxation purposes. Only Commonwealth legislation
that is intended to apply, and does apply, for Commonwealth taxation
purposes will have this effect.

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120. For example, some States have enacted legislation that
extends charitable status to the provision of recreational facilities:
section 103 of the Trusts Act 1973 (Qld); section 69C of the Trustee
Act 1936 (SA); section 5 of the Charitable Trusts Act 1962 (WA) and
section 4 of the Variation of Trusts Act 1994 (Tas). These provisions
mirrored legislation enacted in England, namely the Recreational
Charities Act 1958 (Eng). Although it is recognised that the effect of
interaction of these provisions with the taxation legislation is not
without doubt, it is not accepted that the meaning of ‘charitable’ for
Commonwealth taxation purposes is extended by them. The issue of
how the term charity in a taxing statute would apply across
jurisdictions with different meanings of charity arose in Pemsel. A
United Kingdom taxing statute, which provided concessions for
charities, applied in England and also in Scotland. The meaning of
charity in Scotland differed from that in England. The House of Lords
held that the one meaning of charity would apply under the statute,
and that it would not have a different meaning when applied in
Scotland. In a similar way, the particular extensions made by the
State Acts will not result in different meanings of ‘charitable’ for
Commonwealth tax purposes. The effect of these State extensions
can be contrasted with the extensions made by the Commonwealth in
the Extension of Charitable Purpose Act 2004. The extensions made
by that Act were enacted to apply for all Commonwealth Acts, which
includes the ITAA 1997 and FBTAA. That is, they were intended to
apply, and do apply, for Commonwealth tax purposes. Also, the fact
that the Commonwealth has made extensions to the meaning of
charity for all Commonwealth Acts (by the Extension of Charitable
Purpose Act 2004 ) is consistent with the view that for those purposes
the meaning is not determined by State law.
121. The provision of child care services on a non-profit basis, and
the provision of a rental dwelling under the National Rental
Affordability Scheme by an entity t hat is endorsed as exempt from
income tax, have been deemed to be charitable for the purposes of
Commonwealth legislation.
83

Child care services
122. The Extension of Charitable Purpose Act 2004 states that ‘the
provision of child care services on a non-profit basis’ is a charitable
purpose. This deeming applies, from 1 July 2004, in determining
whether an institution or fund is charitable for the purposes of the
ITAA 1997, the FBTAA and other Commonwealth Acts.

83 Sections 4 and 4A of the Extension of Charitable Purpose Act 2004.

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123. Child care services include those of day care, long day care
(full-time and part-time), casual care, before and after school hours
care, vacation care, occasional care, and similar sorts of care. These
services are not limited to pre-school-aged children.
84 The
categorisation of services as ch ild care under government programs
would commonly be a strong indicator that they qualify as child care
services for the purposes of the Extension of Charitable Purpose Act
2004 . The provision of child care services includes matters that are
merely incidental or ancillary to those services.
124. On the non-profit requirement, the Explanatory Memorandum
to the Extension of Charitable Purpose Bill 2004 states it will not
prevent the making of ‘profits (or gains) or accumulating surpluses,
provided those profits are not for the purpose of profit or gain to its
individual members or distribution to its owners or members, or to any
other person, either while operating or on winding up’.
85 The charging
of fees for the child care services will not be inconsistent with the
non-profit requirement.
125. While the provision of child care services on a non-profit basis
can be treated as a charitable purpose, it will be necessary for the
entity to satisfy the other criteria for a charitable institution or fund.
This includes the ‘public benefit’ requirement (see paragraph 10 of
this Ruling). For example, if the child care services were to be
available only for children of employees of a particular employer, the
difficulties discussed from paragraph 231 of this Ruling on private
benefits would arise.

National Rental Affordability Scheme dwelling
126. The provision of a rental dwelling is deemed to constitute a
charitable purpose if it is provided by an entity that is:
• endorsed as exempt from income tax under
section 50-105 of the ITAA 1997
• an approved participant in the National Rental
Affordability Scheme; and
• an ‘allocation’ (that is, the allotment of an entitlement to
receive an incentive if certain conditions are satisfied)
in relation to the dwelling has been made during the
establishment phase of the Scheme.
86

84 While it will not normally be necessary to distinguish child care services from education and health care, caring for children in a hospital or educating children in
a school would not be the providing of ch ild care services. Generally, where a
non-profit entity provides bot h child care services and education (in, say, its
pre-school), both purposes would be c haritable – the child care under the
Extension of Charitable Purpose Act 2004 and the education under the ‘second
head’ of charity.
85 At paragraph 1.12 of the Explanatory Memor andum to the Extension of Charitable
Purpose Bill 2004.
86 Section 4A of the Extension of Charitable Purpose Act 2004.

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127. The provision of the dwelling has effect as a charitable
purpose only during the incentive period for the allocation. 87
128. The deeming provision applies from 1 July 2008.

Public benefit
129. Charity is altruistic and intends social value or utility. An
essential characteristic of a charitable purpose is that it is of
recognised public benefit. This requirement – also called social value
– has two aspects: there has to be a value or benefit to the
community, and that value or benefit has to be available to the public.
Although the two aspects are not separate, they each have special
features.

Value or benefit
130. The value or benefit provided by a charitable purpose must be
of worth, advantage, utility, importance or significance. It can be
either tangible (such as accommodation provided by a hostel for the
homeless) or intangible (like the moral benefits derived from
prevention of cruelty to animals).
131. There is a common law rebuttable presumption of benefit to
the community where a purpose falls within one of the first three
heads of charity. In National Anti-Vivisection Society v IRC [1948] AC
31 the Court said at 42:
The test of benefit to the communi ty goes through the whole of Lord
Macnaghton’s classification, though as regards the first three heads,
it may be prima facie assumed unless the contrary appears.
Where ‘the contrary appears’, or the purpose comes under the fourth
head of charity, an applicant must prove benefit.
132. While purposes may be more or less beneficial when looked
at from different points of view, a charitable purpose must be of
benefit overall. The benefit must be real or substantial; it must not be
negligible.
88 Nor can it be harmful on balance.
133. Relevant factors in deciding whether a purpose is of sufficient
value include community consensus, general notions of value and
expert evidence. For example, in Victorian Women Lawyers, an
association with the principal purpose of removing barriers and
increasing opportunities for women in the legal profession in Victoria
was accepted as a charitable institution. Having regard to the social
norms reflected in anti-discrimination legislation in particular, the
Association’s purpose was considered to be beneficial to the
community.
89

87 Subsection 4A(2) Extension of Charitable Purpose Act 2004 . 88 Re Pinion (deceased); Westminster Bank Ltd v. Pinion and Anor [1965] Ch 85;
[1964] 1 All ER 890.
89 Victorian Women Lawyers (2008) 170 FCR 318; [2008] FCA 983 at paragraph 148.

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134. The factors, and the weight given to the factors, may vary with
the type of purported benefit. The fact that a purpose is lawful and
has many advocates is not sufficient to make it charitable. A
community consensus may be relevant but is not essential in finding
a charitable purpose.
90
135. If the particular circumstances indicate the purported benefit is
in fact insufficient, the purpose is not charitable. For example, In re
Pinion (deceased); Westminster Bank Ltd. v. Pinion and Anor [1965] Ch 85; [1964] 1 All ER 890, the testator left some pictures painted by
himself and some antique furniture, silver and china to the National
Trust. It was argued that the articles in question possessed an
educational value. However expert evidence showed that the items
possessed little, if any, educational benefit to the community. The
court held there was no charitable trust and commented that there
was no ‘useful object to be served in foisting on the public this mass
of junk’.
91 On the other hand, some benefits or values to the
community are not scrutinised to such a degree. For example,
spiritual benefits are not analysed to draw a distinction between one
religion and another.
92

Available to the public
136. Subject to the exception at paragraph 137 of this Ruling, the
benefit of a charitable purpose must be available to the public. It need
not be available to everyone in a community, but it must be for at
least an appreciable section of it.
93 Whether or not a particular
section is sufficient will depend on the purpose. 94 The purpose must
not be to provide private benefits.
137. Unlike other charitable purposes, the relief of poverty does not
have to satisfy this element. As long as the purpose is the relief of
poverty, but not the relief of poverty of particular poor persons, it can
be charitable even if the benefit is not available to the public at large.
For example, in Dingle v. Turner [1972] AC 601; [1972] 1 All ER 878,
the House of Lords said at AC 623; All ER 888 that the dividing line
between a charitable trust and a private trust ‘lies where the Court of
Appeal drew it in In re Scarisbrick’s Will Trusts; Cockshott v. Public
Trustee and Ors [1951] Ch. 622’, which was that it ‘depended on
whether as a matter of construction the gift was for the relief of
poverty amongst a particular description of poor people [charitable] or
was merely a gift to particular poor persons, the relief of poverty
among them being the motive of the gift [private]’.
95

90 Everywoman’s Health Centre Society (19 88) v. Minister of National Revenue
[1992] 2 FC 52 at 68-9.
91 Re Pinion (deceased); Westminster Bank Ltd v. Pinion and Anor [1965] Ch 85;
[1964] 1 All ER 890 at 894; Re Elmore (deceased) [1968] VR 390.
92 In re Watson (deceased); Hobbs v. Smith and Ors [1973] 3 All ER 678 at 688. 93 Verge v. Somerville [1924] AC 496. 94 See eg Davies v. Perpetual Trustee Company [1959] AC 439 at 456. 95 Dingle v. Turner [1972] AC 601 at 617; [1972] 1 All ER 878 at 883.

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138. An entity’s structure or objects will sometimes clearly indicate
whether it intends community benefit. For example, the running of a
company for the private profit of it s shareholders is incompatible with
a purpose of benefiting the public; the company is carried on for its
owners, even if, as a consequence of its operations, the public
receives some benefit.
96 On the other hand, a trust for ‘the benefit of
the people of Maryborough’ is for the public benefit as the people of
Maryborough would constitute a section of the public.
139. Where an entity’s structure or objects do not clearly indicate
whether it intends community benefit, it will be necessary to consider
who it is intended to benefit, the ways in which they are to benefit,
and the nature of the benefit or value.
97 It can be a matter of fact and
degree as to whether a purpose is for the public benefit.
140. Placing limits on who can benefit is generally incompatible
with an intention of benefiting the public if the limits are by reference
to a personal connection that is not available to the public generally,
such as:
• being members of a family or a group which is based
on personal relationships to particular persons;
98
• contractual relationships (for example, the employees
of a particular employer);
99 and
• membership of bodies that can admit or exclude
members of the public.
100
In these situations, benefits are usually intended for people in their
capacity as relatives, employees or members rather than as a
section of the public.
141. Limitation to groups with particular characteristics within a
community – residents of a particular geographic area, the adherents
of a particular religion, those following a particular calling or
profession,
101 or sufferers of a particular disability or condition 102 –
can be consistent with the public requirement, unless the limits are
incompatible with the nature of the benefit. For example, limiting
access to a library to residents of a particular town could still be for
the public benefit, but limiting the use of a bridge to adherents of a
particular religion would not.
103

96 Subject to the discussion from paragraph 242 of this Ruling regarding distributions to owners or members that are themselves charitable.
97 Dingle v. Turner [1972] AC 601; [1972] 1 All ER 878. 98 Re Compton; Powell v. Compton [1945] 1 All ER 198. 99 Oppenheim v. Tobacco Securities Trust Co. Ltd and Ors [1951] AC 296; [1951] 1
All ER 31.
100 In re Income Tax Acts (No 1) [1930] VLR 211. 101 In re Income Tax Acts (No 1) [1930] VLR 211 at 223. 102 Thompson and Anor v. Federal Commissioner of Taxation (1959) 102 CLR 315 at
321 per Dixon CJ.
103 Viscount Simonds in Inland Revenue Commissioners v. Baddeley and Ors [1955] 1 All ER 525 at 534 and see also Dingle v. Turner and Ors [1972] AC 601 at 625;
[1972] 1 All ER 878 at 889.

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142. Limiting the number of people who can benefit can also be
consistent with the public benefit requirement unless the number is
numerically negligible.
104
143. Where the limits on access are imposed for the sake of better
providing community value, they can be compatible with the public
benefit requirement. Examples can include the enrolment procedures
of schools, referral policies of medical clinics, and borrowing rules of
libraries. Such limits can also be for the sake of the continuation and
efficient administration of the charity.
144. The ways in which people are to benefit can help show
whether a purpose is for the public benefit. The charging of fees to
members of the public for goods, services or other benefits that are
provided for a purpose that is otherwise charitable is unlikely, on its
own, to prevent the purpose being charitable.
105 However, if the
purpose of the arrangement (rather than being an incident of carrying
out a charitable purpose) is to confer benefits on people by way of
fee,
106 by way of contractual right, 107 through common action for
mutual gain, 108 or as part of carrying on a particular business, 109 then
the purpose is unlikely to be charitable. 110 In these situations, even if
the benefit is of a kind that is conventionally provided by charities, the
purpose of providing that benefit in these situations would not be
charitable.

104 Oppenheim v. Tobacco Securities Trust co Ltd [1951] AC 297 at 306; Aboriginal
Hostels Ltd v. Darwin City Council (1985) 75 FLR 197 at 209.
105 The Abbey, Malvern Wells Ltd v. Minister of Town and Country Planning [1951] 2
All ER 154 (school charging fees for students); Le Cras v. Perpetual Trustee Co.
Ltd and Ors; Far West Children’s Health Scheme and Ors v. Perpetual Trustee
Co. Ltd and Ors [1967] 3 All ER 915 (hospital charging fees).
106 Comments of Rowlatt J in The Commissioners of Inland Revenue v. The Society
for the Relief of Widows and Orphans of Medical Men and The Commissioners of
Inland Revenue v. The Medical Charit able Society for the West Riding of
Yorkshire (1926) 11 TC 1 at 22, as clarified by comments of Peter Gibson J in
Joseph Rowntree Memorial Trust Housing Association Ltd and Ors v. Attorney-
General [1983] 1 All ER 288.
107 Doust v. Attorney-General (1904) 4 SR (NSW) 577 (employee accident fund); In
re Harris Scarfe Limited [1935] SASR 433 (employee superannuation fund);
Over-Seventies Housing Association v. Westminster City Council (1974) 21 RRC
48 (tenant’s association).
108 Braithwaite v. Attorney-General [1909] 1 Ch 510 (friendly society); Re Trusts of
Hobourn Aero Components Ltd’s Air Raid Distress Fund; Ryan and Ors v. Forrest
and Ors [1946] 1 All ER 501 (subscribers fund); Lord Nuffield as Ordinary Trustee
of the Nuffield Foundation v. Commissioner s of Inland Revenue; Trustees of the
Nuffield Provident Guarantee Fund v. Commissioners of Inland Revenue (1947)
28 TC 479 (mutual insurance association).
109 Re Producers’ Defence Fund [1954] VLR 246 (assistance to rural producers
especially with employment disputes); The Corporation of Foreign Bondholders v.
Inland Revenue Commissioners [1944] 1 All ER 420 (protection of foreign
bondholders); Re Davis (deceased); Watts v. Davis & Westralian Farmers
Co-operative Limited [1965] WAR 25 (assistan ce to co-operatives).
110 Purposes that are not charitable be cause private benefits are conferred are
discussed from paragraph 231 of this Ruling.

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145. The purpose of providing a public benefit is the essential
purpose of a charity. If the benefits for the public are simply the
consequences of pursuing purposes that are not charitable, it would
not be a charity. For example, the public may benefit from having
local access to a supermarket but that does not make the
supermarket a charity.
146. Because charities act for the benefit of the public, it is
practically inevitable that people benefit from them. However, this
personal benefit is merely incidental to the carrying out of the
charitable purpose. For example, while it is the individual students of
a charitable school who are educated, those private benefits are
merely the result or consequence of carrying out the educational
purpose. Similarly, in Victorian Women Lawyers the fact that
members themselves may have benefited from the activities of the
Association did not adversely affect the charitable purpose because
the activities of the Association were ‘plainly directed to the larger
object and in many cases to a larger audience’.
111
147. In some situations an object that, if viewed in isolation, would
be non-charitable, is charitable due to the degree of its integration
with essential aspects of carrying out a charitable purpose. For
example, a students union of a medical college was accepted as a
charity. Its objects were ‘to promote, encourage and coordinate
social, cultural and athletic activities amongst the members and to
add to the comfort and enjoyment of the students’. While a ‘club
which provides athletic and social activities for its members is not, per
se, charitable’, the integration of the union in the educational
purposes of the medical college gave it a charitable character. In light
of all the facts, the union was found to be solely to further the
educational purposes of the medical college, and the benefits it
provided to students were merely incidental to that purpose.
112
148. Values or benefits are not limited to a closed or historical list.
What constitutes a purpose that is beneficial to the community can
change over time as needs are satisfied, new needs arise or views
change. For example, in Attorney-General (NSW) v. Sawtell and
Anor
113 the Supreme Court of New South Wales considered whether
a bequest to organisations promoting the preservation of wildlife
constituted a valid charitable trust. Holland J concluded that it did,
saying at 205:
… the question whether a particular purpose is for the benefit of the
community is necessarily a question of the time at which it has to be
answered, because it is the knowledge, ideas, hopes, pleasures,
needs, burdens and woes of a given society which determine where
the welfare of its members lies an d these things change over the
years, sometimes with remarkable rapidity.
111 Victorian Women Lawyers (2008) 170 FCR 318; [2008] FCA 983 at paragraph
149.
112 London Hospital Medical College v. Inland Revenue Commissioners and Anor
[1976] 2 All ER 113.
113 [1978] 2 NSWLR 200.

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149. The public requirement is further illustrated for different types
of benefit by the court decisions summarised from paragraph 315 in
Appendix 2 to this Ruling.

Deemed public benefit
150. Institutions that have been deemed by legislation to have a
purpose that is for the public benefit are:
• closed or contemplative religious orders that regularly
undertake prayerful intervention at the request of
members of the public; and
• open and non-discriminatory self-help groups.
114

Closed or contemplative religious orders
151. An institution is taken to be for the public benefit to the extent
it is ‘a closed or contemplative religious order that regularly
undertakes prayerful intervention at the request of members of the
public’. This is provided for by section 5 of the Extension of Charitable
Purpose Act 2004 . It applies from 1 July 2004, in determining whether
an institution is a charity for the purposes of the ITAA 1997, the
FBTAA and other Commonwealth Acts.
152. This deeming overcomes the effect of doubts about whether
such orders are for the public benefit. The Explanatory Memorandum
to the Extension of Charitable Purpose Bill 2004 states that in
‘ Gilmour v. Coats [1949] AC 426 the House of Lords expressed the
view that there is no proven or provable benefit to the community if
the results of the contemplation are in no way communicated to the
public’.
115 The intention of the deeming is that ‘closed or
contemplative religious orders that offer prayerful intervention to the
public’ will be taken to ‘satisfy the public benefit test’.
116
153. The ways in which members of the public can request the
prayerful intervention are not specified in the law. They might range
from formal mechanisms like a website portal, to letters and individual
requests. The Explanatory Memorandum states that ‘if the order
prays for any members of the faith community who seek it, then they
will be treated as satisfying the public benefit requirement’.
117
154. This deeming does not affect whether such a religious order
meets the other requirements to be a charitable institution. This has
to be determined in the same way as for other institutions.

114 Extension of Charitable Purpose Act 2004 . 115 At paragraph 1.20 of the Explanatory Memor andum to the Extension of Charitable
Purpose Bill 2004. Cf Association of Franciscan Order of Friars Minor v. City of
Kew [1967] VR 732 and Perpetual Trustee Co. Ltd v. Wittscheibe (1940) 40 SR
NSW 501.
116 At paragraph 1.21 of the Explanatory Memor andum to the Extension of Charitable
Purpose Bill 2004.
117 At paragraph 1.23 of the Explanatory Memor andum to the Extension of Charitable
Purpose Bill 2004.

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Self-help groups
155. An institution is for the public benefit to the extent that it is an
open and non-discriminatory self-help group. This is provided for by
section 5 of the Extension of Charitable Purpose Act 2004. It applies
from 1 July 2004, in determining whether an institution is a charity for
the purposes of the ITAA 1997, the FBTAA and other Commonwealth
Acts.
156. An institution is an ‘open and non-discriminatory self-help
group’ under subsection 5(2) of the Extension of Charitable Purpose
Act 2004 if:
• it is an association of individuals that has an open and
non-discriminatory membership;
• it is established for the purpose of assisting individuals
affected by:
– a particular disadvantage or discrimination; or
– a need, arising out of a particular disadvantage
or discrimination, that is not being met;
• it is made up of, and controlled by, individuals who are
affected by the disadvantage or discrimination;
• all of its criteria for membership relate to its purpose;
and
• its membership is open to any individual who satisfies
the criteria.
157. Being an open and non-discriminatory self-help group does
not mean, on its own, that the institution is a charitable institution.
Section 5 of the Extension of Charitable Purpose Act 2004 only deals
with one aspect of being a charity, namely whether the public benefit
requirement is met. It does not determine whether the institution is
charitable, and it does not cause an organisation to be an institution.
These additional matters have to be determined in the same way as
for other organisations. For example, a purpose of helping residents
of a particular remote town to take skiing holidays would be unlikely to
be charitable, irrespective of whether it qualified as an open and
non-discriminatory self-help group. These additional requirements are
explained throughout this Ruling.

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158. To satisfy the statutory definition of ‘open and
non-discriminatory self-help group’, the institution must be established
for the purpose of assisting individuals. The individuals must be
affected by a particular disadvantage or discrimination, or a need
arising out of a particular disadvantage or discrimination that is not
being met. While self-help groups are particularly common in the area
of health (for example, for particular diseases or disabilities, or for
particular treatments), the definition is not limited to them. The
requirement of being in respect of ‘a particular disadvantage or
discrimination’ can extend beyond health and disability. For example,
such disadvantage or discrimi nation could flow from language
difficulties in education, geographic isolation in relation to the arts, or
cultural exclusion in relation to religion.
159. The assistance provided by the self-help group must be of a
kind that is connected with the particular disadvantage, discrimination
or unmet consequential need.
160. Moreover, while a self-help group may be taken to satisfy the
public benefit requirement of being a charity pursuant to the
Extension of Charitable Purposes Act 2004 , the group must
nevertheless have a purpose that is charitable in its technical legal
meaning. That is, the matter identified as the disadvantage or
discrimination must be of a kind that is consistent with the meaning of
charitable purpose.
161. The requirement of open membership looks to both the
institution’s rules and also to its reality and substance in light of what
actually occurs. That is, it is not sufficient for an institution to have
rules that are consistent with open and non-discriminatory
membership. In addition to the rules of membership, it must also in
reality operate in a manner that is consistent with having open and
non-discriminatory membership.
162. Circumstances that would not, on their own, prevent an
institution being an open and non-discriminatory self-help group
include:
• membership fees, where the fees are reasonable;
• the expulsion of members, on legitimate grounds such
as failure to pay membership fees or failure to comply
with reasonable requirements;
• membership and control by family, friends, helpers or
supporters of individuals directly affected by the
particular disadvantage or discrimination;
118
• different classes of membership, with different rights,
where the differences are for the sake of and

118 For example, where the sufferers of a medical condition were children, their parents and carers could be the ones to control and be members of the group.
That is, there is no requirem ent that the children themselves control the group or
be its members.

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consistent with the purposes; 119
• providing assistance to non-members; and
• the limitation of membership to people of a particular
locality or condition, unless it was to exclude those who
might otherwise reasonably participate.

Charitable institution or fund
163. The distinction between an institution and a fund is a
significant one for the purposes of the tax provisions affecting
charities, as the conditions for exemption under section 50-5 of the
ITAA 1997 are different,
120 some tax concessions can only apply
where the charity is a charitable institution, 121 and the features and
circumstances that are taken into account in determining the purpose
of a fund are not as extensive as those for determining the purpose of
an institution.
164. The characterisation of a charity as an institution or a fund is a
question of fact.

Charitable institution
165. In Stratton v. Simpson (1970) 125 CLR 138, Gibbs J
considered the meaning of ‘institution’ and said at 157-158:
In its ordinary sense ‘institution’ means ‘an establishment,
organisation, or association instituted for the promotion of some
object, especially one of public utility, religious charitable,
educational etc’ (The Shorter Oxford English Dictionary). It means,
as was said in Mayor etc of Manchester v. McAdam, ‘an undertaking
formed to promote some defined purpose…’ or ‘the body (so to
speak) called into existence to translate the purpose as conceived in
the mind of the founders into a living and active principle’. Although
its meaning must depend on its cont ext, it would not ordinarily
connote a mere trust’.
166. Whether an entity is an institution is determined by looking at
the whole of the entity’s circumstances.

119 For example, the rules of a disease self-help group might have a class of
members for sufferers of the disease, and a class for carers, with only the former
being eligible to sit on the board. Alternatively, one class might be for sufferers
and carers who live in the locality and regularly attend meetings, and another for
those who participate mainly by email and telephone.
120 These are explained in Taxation Ruling TR 2000/11. 121 For example, the gift deductibility for heal th promotion charities under item 1.1.6
of the table in subsection 30-20(1) of the ITAA 1997, and the exempt fringe
benefits under section 57A of the FBTAA, require them to be charitable
institutions. Gift deductibility In relation to harm prevention charities under item
4.1.4 of the table in subsection 30-45(1 ) also requires that the charity be a
charitable institution.

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167. No particular structure is prescribed for charitable institutions.
Some institutions take the form of corporations limited by guarantee,
unincorporated associations or charitable trusts. A testator can found
and endow an institution by their will.
122 The forming of an association
and incorporation are not sufficient on their own. 123
168. A structure controlled and operated by family members and
friends will not be accepted as an institution where it has a small and
exclusive membership and undertakes limited activities: Pamas
Foundation (Inc) v. Commissioner of Taxation (1992) 35 FCR 117; 92
ATC 4161; (1992) 23 ATR 189 ( Pamas). In Pamas , a foundation
incorporated by a doctor and operated and controlled by the doctor,
his family and close friends was not accepted as a religious
institution. In reaching its decision, the Court took into account the
fact that the membership of the Foundation was small and exclusive
and the scale of its activities was relatively small.
169. Through growth in membership, activities and recognition a
body may become an institution, even if it has evolved from a small
group of people who were not an institution at an earlier stage.
124
170. Whether an institution exists will depend on the
circumstances. Relevant factors include an entity’s activities, size,
permanence and recognition.
171. Although an institution ‘need not be a body corporate, and
need not be restricted to bricks and mortar’,
125 it must possess a
quality or function which can justify it being categorised as an
institution as opposed to, say, a ‘mere trust’.
126 For example, a trust
that simply provides money in order for charitable services or
activities to be carried out by others is not an institution.
127 Nor is a
trust where the role of the trustees is ‘simply to apply the income of
the trust in providing gifts and donations to such public charitable
objects as they, in their discretion, determine’.
128 In Commissioner of
Land Tax (NSW) v. Joyce and Ors
(1974) 132 CLR 22; (1974) 5 ATR 32,
four trustees whose only function was ‘the management of trust
property consistently with the trust deed and with the wish it
expressed that the trust property should primarily be devoted to
providing a meeting place for Christians’ were found not to be an
institution.
129 On the other hand, a trust that can be identified as
carrying on activities or providing services relevant to its charitable
purpose could be an institution.
130 Where a trust is not a charitable
institution because the only function of the trustees is to manage trust
property in accordance with the terms of a trust deed, the trust could
still qualify as a charitable fund.

122 Lemm v. Federal Commissioner of Taxation (1942) 66 CLR 399 at 409-410 per
Williams J.
123 Pamas Foundation (Inc.) v. Commissioner of Taxation (1992) 35 FCR 117; 92
ATC 4161; (1992) 23 ATR 189.
124 Christian Enterprises Ltd v. Commissioner of Land Tax (1968) 88 WN (Pt. 2)
(NSW) 112 at 120.
125 Trustees of the Indigenous Barristers’ Tr ust v. Federal Commissioner of Taxation
(2002) 127 FCR 63; [2002] FCA 147 4 at paragraph 26. See also The Young
Men’s Christian Association of Melbourne v. Federal Commissioner of Taxation

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172. The Privy Council provided some examples of what could
constitute an institution: ‘… the charitable institutions exempted are
those which are institutions in the sense in which boards of trade and
chambers of commerce are institutions, such as, for example, a
charity organisation society, or a society for the prevention of cruelty
to children.’
131 Institutions accepted by the High Court in this and
related contexts have included a university and a university
college,
132 a publisher of law reports, 133 a YMCA, 134 a Boys’
Brigade, 135 a home for aged women, 136 and an associat 137 ion of
urgeons.

ing and it cannot have any independent non-charitable
ply
pose (as opposed to
independent of it) can be charitable.

s

Charitable purpose
173. For an institution to be a charitable institution, its only or its
‘main or predominant or dominant’ purpose (commonly referred to i
n
this Ruling as its ‘sole purpose’) must be charitable, in the technical
legal mean
138
purposes.
174. An institution with non-charitable purposes that are sim
incidental or ancillary to a charitable pur
139

(1926) 37 CLR 351 where Higgins J said at 361: ‘The existence of a distinctive
building is not, I think, essential to the word ‘institution’.’
126 See Stephen J in Commissioner of Land Tax for t he State of New South Wales v.
Joyce and Ors (1974) 132 CLR 22 at 32; (1974) 5 ATR 32 at 39-40; Sargeants
Charitable Foundation v. Chief Commissioner of State Revenue 2005 ATC 4632;
[2005] NSWSC 659 at paragraph 25.
127 See Trustees of the Indigenous Barrister s’ Trust v. Federal Commissioner of
Taxation (2002) 127 FCR 63; [2002] FCA 1474 and Re SIM Australia as trustee
for SIMAID Trust and Federal Commissioner of Taxation [2007] AATA 1443; 2007
ATC 2243; (2007) 66 ATR 908.
128 Trustees of the Allport Bequest v. FC of T 88 ATC 4436 at 4441; (1988) 19 ATR
1335 at 1341.
129 See also Douglas and Ors v. Federal Commissioner of Taxation (1997) 77 FCR
112; 97 ATC 4722; (1997) 36 ATR 532
. 130 See Trustees of the Indigenous Barrister s’ Trust v. Federal Commissioner of
Taxation (2002) 127 FCR 63; [2002] FCA 1474 at paragraph 31.
131 Minister of National Revenue v. Trusts and Guarantee Co Ltd [1940] AC 138 at
149-150.
132 University of Birmingham and Anor v. Federal Commissioner of Taxation (1938)
60 CLR 572; (1938) 5 ATD 63 (public educational institution).
133 The Incorporated Council of Law Reporting of the State of Queensland v. Federal
Commissioner of Taxation (1971) 125 CLR 659; 71 ATC 4206; (1971) 2 ATR 515
(charitable institution).
134 The Young Men’s Christian Association of Melbourne v. Federal Commissioner of
Taxation ( 1926) 37 CLR 351 (religious institution).
135 Maughan v. Federal Commissioner of Taxation (1942) 66 CLR 388 (public
benevolent institution).
136 Lemm v. Federal Commissioner of Taxation (1942) 66 CLR 399 (public
benevolent institution).
137 Royal Australasian College of Surgeons v. Federal Commissioner of Taxation
(1943) 68 CLR 436; (1943) 7 ATD 289 (scientific institution).
138 See Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 17. 139 See Congregational Union of NSW v. Thistlethwayte (1952) 87 CLR 375 at 442;
Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 17.

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175. If an institution exists or operates for any independent purpose
that is not a charitable purpose, it will not be a charitable institution
even if its non-charitable purpose is secondary or minor in nature. For
example, in Navy Health
140 a health fund established for armed
services personnel and their dependants was not charitable because
membership was also available to civilians. Jessup J said at
paragraph 71:
That such a group of persons, numerically minor though they were in
the overall scheme of the applicant’s operations, should be within
the cohort of persons whom t he applicant benefited does, in my
view, demonstrate that the applicant had as an object the provision
of health benefits to persons who fell outside the Downing principle.
This object could not be described as ancillary or incidental in the
sense explained above. The object was, I consider, a substantive
and free-standing one on its own.
176. The assessment as to purpose is an ongoing one. In Word
Investments, the High Court confirmed that in characterising an
institution, consideration has to be given to the purpose for which it
continues to be conducted, not just the purpose for which it was
established.
141
‘Main or predominant or dominant’ purpose
177. The courts have used various terms to explain the required
purpose of a charitable institution. The terms used are not uniform
and misunderstandings can arise.
178. When describing the character of a charitable institution, it is
sometimes referred to as being ‘exclusively’ charitable, or for
charitable purposes ‘only’, because it has no independent
non-charitable purposes. When comparing charitable purposes with
incidental purposes, the cases also refer to the charitable purpose as
the ‘dominant’, ‘main’, ‘predominant’, ‘prevailing’, ‘essential’ or
‘dominating’ purpose. In Word Investments the High Court said at
paragraph 17 (with reference to its decision in Royal Australasian
College of Surgeons v. Federal Commissioner of Taxation
142 ):
In examining the objects [of an institution], it is necessary to see
whether its main or predominant or dominant objects, as distinct
from its concomitant or incidental or ancillary objects, are charitable.
140 Navy Health Ltd v. Federal Commissioner of Taxation (2007) 163 FCR 1; [2007] FCA 931.
141 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 34. 142 (1943) 68 CLR 436; (1943) 7 ATD 289.

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179. Expressions like ‘dominant’ and ‘main’ can have different
meanings in different legal contexts. In the context of the law relating
to charities, it means that any other purposes are no more than
‘incidental, subservient and ancillary, only lawfully to be pursued as
conducive to promoting’ the dominant purpose.
143 As explained in
paragraph 5 the ‘main or predominant or dominant purpose’ is
referred to as the ‘sole purpose’ in this Ruling to avoid confusion.

‘Incidental or ancillary’ purpose
180. As noted in paragraph 174 of this Ruling, a charitable
institution may have purposes which, when viewed in isolation would
be non-charitable, but which are only incidental or ancillary to its
charitable purpose.
181. In the decision of the Federal Court in Navy Health Jessup J
said at paragraph 65:
When the courts have described objec ts of an institution as ancillary,
incidental or concomitant to a main object, they have not meant that
the lesser object was merely a minor one in quantitative terms.
Rather, they have required that obj ect not be of substance in its own
right, but only to be something which tends to assist, or which
naturally goes with, the achievement of the main object.
182. For the purposes of this Ruling, ‘incidental or ancillary’ means
for the sake of, or in aid of, or in furtherance of, an institution’s
charitable purpose. It does not mean minor in quantitative terms. As
long as these other purposes are wholly incidental or ancillary to
fulfilling or furthering the instituti on’s charitable purpose so that they
are, in reality, only aspects of the charitable purpose, they will not
affect the charitable status of the institution.
144
183. Determining whether a purpose is incidental or ancillary
involves questions of degree, judgment, proportion, impression and
weight. It is not enough that the purpose might happen to further a
charitable purpose: it must be genuinely for the sake of, in aid of, or
in furtherance of, the charitable purpose.
184. As well as the term ‘incidental or ancillary’, other expressions
used in the cases are ‘subsidiary’ and ‘concomitant’. They all express
the idea that the objects or purposes are not ends in themselves but
are only for the sake of, or in aid of, or in furtherance of, the
accomplishment of the institution’s charitable purpose.

Independent purpose
185. A purpose is an independent purpose if it is an end in itself
rather than incidental or ancillary to another purpose.

143 Stratton v. Simpson (1970) 125 CLR 138 at 148 per Windeyer J. 144 See Congregational Union of New South Wales v. Thistlethwayte and Ors ( 1952)
87 CLR 375 at 442 per Dixon CJ, McTiernan, Williams and Fullagar JJ; Navy
Health (2007) 163 FCR 1; [2007] FCA 931; Commissioner of Taxation v. The
Triton Foundation (2005) 147 FCR 362; [2005] FCA 1319.

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Finding purpose
186. Finding an institution’s purpose involves an objective weighing
of all its features. These can include its constituent or governing
documents, its activities, policies and plans, administration, finances,
history and control, and any legislation governing its operation.
145

Objects in constituent documents
187. An institution’s constituent documents will formally set out the
reasons for which it is to exist and operate. Different documents will
name these reasons differently – for example as ‘objects’ or
‘purposes’ or ‘trusts’. In this Ruling, for consistency, they are
described as objects.
188. The objects in the constituent documents of an institution and
its activities which give effect to those objects are the starting point in
determining whether an institution is charitable, and will commonly
have the most weight. In Word Investments, the High Court said at
paragraph 17:
… there is no reason to suppose that the tests laid down in the s
23(e) line of cases no longer apply in relation to the 1997 Act to
companies like Word, which state objects in a memorandum. That is,
it is necessary to examine the objects, and the purported
effectuation of those objects in the activities, of the institution in
question.
189. The objects in an institution’s constituent documents can
strongly indicate whether it is for a sole 146 charitable purpose. That is,
in expressing what an institution’s purpose is, the most apt
description will commonly be that found in the institution’s objects. For
example the objects might clearly limit the institution to advancing
education for the public benefit, or to caring for the poor, or for
purposes accepted by the courts as being charitable. Where the
constitution states that the institution is solely for charitable purposes
and the institution gives effect to them wholly in a charitable way for
the public benefit, it will be a charitable institution.
190. Considered in isolation, some of an institution’s objects might
not be characterised as charitable. However, where the
non-charitable objects are merely incidental or ancillary to its
charitable purpose the institution can still be a charitable institution.

145 For example, Tasmanian Electronic Commerce Cent re Pty Ltd v. Commissioner of
Taxation (2005) 142 FCR 371; [2005] FCA 439 and Commissioner of Taxation v.
The Triton Foundation (2005) 147 FCR 362; [2005] FCA 1319.
146 See paragraph 5 of this Ruling.

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191. For example, in Congregational Union of New South Wales v.
Thistlethwayte (1952) 87 CLR 375 the Union’s objects included
‘United action for the creation, maintenance and improvement of our
educational, religious and philanthropic agencies’ and ‘The
preservation of civil and religious liberty’. The High Court said ‘these
objects must be interpreted in the light of the constitution of the Union
as a whole.’
147 When the constitution was considered as a whole, the
Union could only pursue these ends to the extent they were for the
advancement of religion. Accordingly, these objects did not prevent
the Union from being charitable.
192. However, where a proper understanding of an institution’s
constitution indicates its non-charitable objects are independent
rather than incidental or ancillary, it will not be a charitable institution.
This could occur, for example, where the constitution provides that
each of the objects is to be construed independently of any other,
148
although even in these instances, if the objects state a charitable
purpose when read as a whole, those that taken separately are
beyond that purpose may be read down as being within it.
149
193. Where non-charitable objects are in fact independent of,
rather than incidental or ancillary to, a charitable purpose, the fact
that the non-charitable objects are minor or secondary or rarely
applied is irrelevant. To be charitable, an institution’s sole
150 purpose
must be charitable, and any non-charitable objects can only be
incidental or ancillary to this purpose.
194. Where items listed as ‘objects’ are, when read in the context
of the constituent documents as a whole, truly no more than powers
to give effect to the purposes, they will be treated as powers and not
objects.
151 For example, in Word Investments the company’s
memorandum of association contained a series of clauses listing
what the High Court referred to as its purposes. Many of these had a
religious focus, but others did not – for example, one
subclause provided: ‘To carry on any business or activity which may
seem to the Company capable of being conveniently carried on in
connection with the objects for whic h this Company is established’.
195. The High Court grouped the various clauses into two groups,
concluding that when those in the first group were read as a whole
‘each of them on its true construction states a charitable purpose’,
whilst those in the second group – including the clause quoted in
paragraph 194 of this Ruling – did not amount to purposes. It said
that ‘the former can truly be described as purposes, while the latter
are not to be construed as purposes at all, but rather as powers’ and
noted that the ‘radical difference’ between the matters listed in the
first group and those listed in the second confirmed this view.

147 Per Dixon CJ, McTiernan, Williams and Fullagar JJ at CLR 442. 148 Re Hargreaves [1973] Qd R 448. 149 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 20 . 150 See paragraph 5 of this Ruling. 151 See for example Word Investments (2008) 236 CLR 204; [2008] HCA 55 at
paragraph 19.

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Relevance of activities
196. It is also necessary to consider the activities of the institution.
Where an institution has some objects which are not, on their face,
charitable, its activities can help establish if these objects are simply
incidental or ancillary to a charitable purpose rather than independent
non-charitable objects.
197. For example, in Royal Australasian College of Surgeons v.
Federal Commissioner of Taxation (1943) 68 CLR 436; (1943) 7 ATD
289, the issue was whether the College was a scientific institution.
152
The High Court considered the objects in the College’s constituent
document and its activities in order to determine whether the
College’s dominant purpose was advancing science. The objects
were partly for the promotion of surgical knowledge and practice and
partly for the promotion of professional interests. Its activities included
holding conferences for surgeons to discuss and study surgical
matters, providing a technical surgical library for members, publishing
surgical journals, financing surgical research, conducting
examinations for admission to fellowship of the College, and
administering funds for research and scholarships to medical
students. In light of the activities, the objects that, in isolation, could
have been to promote the professional interests of members, were
determined to be incidental to the dominant purpose of advancing
science.
198. Where the constituent documents of an institution indicate it
has a charitable purpose, it does not matter that its activities may not
be intrinsically charitable. It is the purpose in furtherance of which the
activities are carried out, and not the character of the activities
themselves, that determines whether an institution has a charitable
purpose.
199. For example, in Word Investments a company at various
times carried on an investment business and a funeral business to
provide funds to another charitable institution to enable that other
institution to undertake charitable activities. The High Court found that
the company that carried on those businesses was itself a charitable
institution. It said that the company was charitable because its
purpose was charitable, and that it was simply using its powers to
employ commercial methods to ra ise money for that charitable
purpose:
… Word has only one group of obj ects – a group of objects of
advancing religious charitable purposes. All other ‘objects’ which
may seem to be outside that group are on their true construction
either objects within that group, or powers to carry out objects within
that group.
153
152 Under former paragraph 23(e) of the ITAA 1936. 153 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 19.

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200. This does not mean that an entity that carries on a commercial
enterprise will be charitable simply because it gives some or all of its
profits to a charitable institution.
154 The enquiry is always centred on
whether the sole 155 purpose of the donor entity is charitable.
201. Nor does it mean that once an entity that carries on a
commercial enterprise has been accepted as charitable, it will always
be charitable. Its operations and circumstances could subsequently
evolve in such a way that it would no longer be possible to say that
this is the case. This could occur, for example, where profits from its
commercial activities are continuously applied to further expand its
business operations rather than to give effect to its charitable purpose
so that, in effect, its commercial activities become an end in
themselves rather than a means by which its objects are achieved.
156
202. Where the purpose of an institution that carries on a
commercial enterprise and gives its profits to other charitable
institutions is charitable, the Commissioner will accept that the profits
given to the other charitable institutions are applied for charitable
purposes unless the institution knows or ought to have known that the
institutions will misapply them or has misapplied them.
157
203. Where the constituent documents of an institution indicate its
purpose is charitable, but it undertakes activities that are inconsistent
with it operating for its charitable purpose only, it will not be a
charitable institution. For example, where an institution with a clearly
charitable constitution for the advancement of education operates
solely to advance the education of its controllers, it will not be a
charitable institution. Likewise, an organisation set up to be an
automotive public museum but that in fact operates as an off-road
four-wheel drive club will not be a charitable institution. On the other
hand, activities that may be inconsistent with charity but are isolated
or insignificant, or the unauthorised activities of an employee, should
not affect the charitable status of an institution. As these examples
illustrate, the issue is always whether – in substance and reality – the
institution’s purpose is charitable.

154 See R v. The Assessors of the Town of Sunny Brae [1952] 2 SCR 76. 155 See paragraph 5 of this Ruling. 156 Similar considerations arise where profits are accumulated – see from paragraph
220 of this Ruling.
157 Word Investments (2008) 236 CLR 204; [2008] HCA 55.

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204. Where an institution’s constituent documents show it is not for
charitable purposes, it might nonetheless have activities that would
be indistinguishable from those of a charity. On this basis the claim is
sometimes made that the reality or substance of the institution is
charitable, and that its documentation should not be permitted to
overturn this conclusion. The cases do not support such an argument.
If it is clear from the constituent documents that an institution is not
for charitable purposes only, its activities cannot make it charitable.
For example, if an institution was set up for two separate purposes –
caring in a public way for injured animals, and operating a boarding
kennel for dogs – it would not be for charitable purposes only, even if
it undertook no boarding kennel activities. The fact that all its present
activities were caring for injured animals in a way consistent with
charity, would not be sufficient to show it was a charitable institution.
205. Similarly, an institution is not charitable simply because it uses
means that are commonly adopted by charity. In Molloy v. Inland
Revenue Commissioner (NZ) (1977) 8 ATR 323 the use of
educational means (disseminating information to the public on the
fundamental importance of human life) was not sufficient to show that
the purpose was educational.
206. A charitable effect or consequence flowing from an
institution’s purpose is also not, by itself, sufficient to show a
charitable purpose. In General Nursing Council for England and
Wales v. St Marylebone Corporation [1959] 1 All ER 325 the
Council’s main functions were to maintain a register of nurses and to
prescribe examination and training to that end. It was argued that the
‘… conditions as to training and experience, imposed as a
pre-requisite of registration make the council a charitable
organisation, because these conduce to the advancement of the
nursing of sick persons which is a charitable object’. Lord Keith (at
333-4) disagreed with this view noting that though it might be a
consequence of the Council’s activities it was not the purpose for
which the Council was established.
207. However, the ‘natural and probable’ consequence of objects
and activities can help establish the purpose of an institution or fund.
In Word Investments
158 the High Court said at paragraph 38 that ‘the
charitable purposes of a company can be found in a purpose of
bringing about the natural and probable consequence of its
immediate and expressed purposes, and its charitable activities can
be found in the natural and probable consequence of its immediate
activities’. This reflected the observations of MacDermott J in Baptist
Union of Ireland (Northern) Corporation Ltd v. Commissioners of
Inland Revenue (1945) 26 TC 335 at 348 that ‘the charitable purpose
of a trust is often, and perhaps more often than not, to be found in the
natural and probable consequences of the trust rather than in its
immediate and expressed objects’.

158 (2008) 236 CLR 204; [2008] HCA 55.

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Other factors
208. In the objective weighing of all the features of an institution
referred to in paragraph 186 of this Ruling, other factors beyond the
objects in the constituent documents of an institution and its activities
may also be important. These other factors can shed light on the
purpose of an institution, but do not determine it. As a practical
matter, their importance will vary with the circumstances.
209. Elements (other than the objects) in the constituent
documents that can assist in determining an institution’s purpose and
should also be considered include the not for profit and winding up
clauses, clauses governing who can benefit from the institution’s
activities, and clauses setting out powers such as the power to
accumulate funds.
210. Operational features that can also help substantiate whether
an institution’s purpose is charitable include the policies and
procedures which guide its operations, and the activities and
operations that it actually performs, including the activities of the
executive body, the uses and sources of funds and property, and the
duties and tasks of employees, contractors and volunteers.
211. An institution’s operations and activities are relevant in
applying the statutory extensions in respect of self-help groups
159 and
religious orders 160 under the Extension of Charitable Purpose Act
2004 , but not the provision of non-profit child care services 161 or the
provision of rental accommodation under the National Rental
Affordability Scheme by an entity t hat is endorsed as exempt from
tax
162 (as these are deemed to be charitable purposes).

Purpose of a peak or similar body
212. The same principles and considerations apply in determining
the purpose of a peak or similar body set up by charities to further
their common charitable endeavours. That is, the cases do not
specify different principles for peak or similar bodies. It is recognised,
though, that there will be factual differences between them and the
charities they work with.

159 See from paragraph 155 of this Ruling. 160 See from paragraph 151 of this Ruling. 161 See from paragraph 122 of this Ruling. 162 See from paragraph 126 of this Ruling.

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213. In Ziliani and Anor v. Sydney City Council (Ziliani) 163 a
non-profit unincorporated association of show societies (which were
themselves charities) was accepted as a charity. Its sole
164 purpose
was considered to be the promotion of agriculture which is beneficial
to the community and within the spirit and intendment of the
Preamble to the Statute of Elizabeth, even though:
• its objects included activities of providing material and
assistance on judging, keeping societies informed of
other societies’ activities; and
• it operated services ‘on a mutual and co-operative
basis in respect of matters of uniform concern’
including the provision of a rain protection scheme and
an accident fund.
165
Its other activities were considered ancillary and incidental to its
charitable purpose.
214. To a similar end, in Social Ventures Australia Limited v. Chief
Commissioner of State Revenue [2008] NSWADT 331 the New South
Wales Administrative Decisions Tribunal held that a body whose
objects were to ‘improve the management and operational
performance and to enhance the long term viability of charitable
organisations by… providing educational mentoring and support
services to charitable organisations’ was itself a charitable institution.
In reaching its decision, the Tribunal noted at paragraphs 49 and 50
that:
the Applicant in this matter has in its constitution clear charitable
purposes and carries out its activities directly with other public
charities. The Applicant has bee n created by well-known public
charities with objects to benefit charitable ventures. There are no
private individuals or entrepreneurs as beneficiaries. All funds, other
than those used to pay staff and other proper expenses of the
Applicant are utilised for charitable purposes. It does not carry out
any commercial activities for the whole community at large or in the
‘abstract’. …The Applicant’s activiti es are essentially to ensure that
public charities function efficiently and effectively to help those in
need and the disadvantaged. That mu st satisfy the requirement of
benefit to the community or the public.
163 (1985) 56 LGRA 58. 164 See paragraph 5 of this Ruling. 165 Commissioners of Inland Revenue v. Yorkshire Agricultural Society [1928] 1 KB
611.

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215. These cases illustrate that it is not necessary that a charity
play a ‘direct’ role. 166 They show that a purpose can be for the public
benefit even where the institution does not deal directly with members
of the public. Also, the interrelation of the peak body and its members
can help show a commonality of purposes, notwithstanding the
different ways the bodies pursue them. In Ziliani, the objects of the
association were viewed in light of the overall activities of the
societies in characterising the association itself as a charity. For many
peak bodies there will be a similar degree of integration and
commonality of purpose.
216. When considering peak and similar bodies, support activities
that are integral to the carrying out of the overall charitable purposes
can be merely ancillary and incidental. Examples of such activities
could include accounting and legal services, project management,
hiring and contracting, political representation, insurance and finance,
provision of resources, and policy advice.
167

Purpose may change over time
217. As an institution’s features can change over time, so can its
purpose. An institution’s purpose at the time it was established is a
relevant but not necessarily determinative factor.
168 In Word
Investments, the High Court make it clear that an assessment as to
purpose requires consideration of the purpose for which an institution
is conducted at the time of the assessment, not just when it was
established. The Court said at paragraph 34 (quoting in part from
Cronulla Sutherland Leagues Club Limited v. Commissioner of
Taxation (1990) 23 FCR 82; (1990) 21 ATR 300; 90 ATC 4215):
To avoid doubt in future, it should be noted that it would not be
enough that the purpose or main purpose of an institution were
charitable if in fact it ceased to carry out that purpose. … provisions
in the legislation exempting tax on annual income, have ‘a periodic
operation’; the statute ‘directs the inquiry to a particular time, namely
the year of income so that consideration must be given not only to
the purpose for which the [institution] was established but also the
purpose for which it is currently conducted’.
166 The notion of ‘direct relief’ arises for public benevolent institutions (see Taxation Ruling TR 2003/5), but it does not arise for charitable institutions. Examples of a
charity playing an ‘indirect’ role include – besides Ziliani and Anor v. Sydney City
Council – Presbyterian Church of New Zealand Beneficiary Fund v. Commissioner
of Inland Revenue [1994] 3 NZLR 363 (a retirement plan for clergy) and Re
White’s Will Trusts; Tindall v. Board of Go vernors of the United Sheffield Hospitals
and Ors [1951] 1 All ER 528 (a rest home for nurses).
167 This is not to say that any organisation formed or controlled by charities will itself
be a charity. The circumstances of such an organisation can show, for example,
that its activities are not in tegrated in the pursuit of char itable purposes, that it is
operating for other ends, or that private benefits are not incidental; see Taxation
Ruling TR 2005/22 Income tax: companies controlled by exempt entities.
168 Tasmanian Electronic Commerce Centre Pty Ltd v. Commissioner of Taxation
(2005) 142 FCR 371; 2005 ATC 4219; (2005) 59 ATR 10.

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218. Accordingly, it is possible for an institution that was not
charitable when founded to become a charitable institution, and vice
versa. For example, an institution set up for two separate purposes –
providing public education, and promoting pigeon racing
169 – might
cease any involvement with pigeon racing, amend its constitution and
operate solely to provide public education and so become eligible to
become a charitable institution.

Profit making
219. An institution with a goal of making a profit can still be
charitable if that goal is in aid of its charitable purpose. In Word
Investments the High Court said at paragraph 24:
Word endeavoured to make a profit, but only in aid of its charitable
purposes. To point to the goal of profit and isolate it as the relevant
purpose is to create a false dichotomy between characterisation of
an institution as commercial and characterisation of it as charitable.

Power to accumulate
220. An institution can be charitable even though it has a power to
accumulate profits.
221. In Word Investments the High Court said at paragraph 22:
a power to retain profits conferr ed on directors of a company which
has charitable purposes cannot negate its character as a charitable
institution. Its exercise, while it may delay the moment when assets
are applied to charitable purposes, also increases the chance that
more assets will eventually be so applied.
222. This does not mean that excessive or indefinite accumulation
is acceptable. The charitable status of an institution for tax purposes
is a year by year assessment. An institution that accumulates a
significant proportion of its profits over a number of years needs to be
able to show on a year by year basis that accumulation is still
consistent with it having a charitable purpose.
223. Relevant considerations include whether the institution has
identified when and how its profits are to be applied to its charitable
purpose and, if accumulation is to continue for an extended period,
the reasons for this. An institution that accumulates all or most of its
profits for a number of years may find it difficult to sustain that it is
truly established for a charitable purpose.

169 The Royal National Agricultural and I ndustrial Association v. Chester and Ors
(1974) 48 ALJR 304.

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Charitable fund
224. ‘Fund’ is not defined in the ITAA 1997 and takes its ordinary
meaning. A fund is a pool, stock or store of assets. The dictionary
meanings of fund include ‘stock of money or pecuniary resources’
170
and ‘a stock of money, esp. one set apart for a purpose’. 171
Accordingly, an entity established by will or instrument of trust will be
a fund if it comprises trust property that is merely managed in
accordance with a trust deed and/or held to make distributions to
other entities or persons.
172
225. These entities will not be institutions within the phrase
‘charitable institution’. In Trustees of the Allport Bequest v. FC of T
88 ATC 4436; (1988) 19 ATR 1335, an organisation which was
established by Act of Parliament was held not to be an institution
where its only activities were to manage trust property and apply the
income by donating to such other charitable organisations and
objects as it determined.
173 In Commissioner of Land Tax for the
State of New South Wales v. Joyce and Ors (1974) 132 CLR 22;
(1974) 5 ATR 32, four trustees whose only function was ‘the
management of trust property consistently with the trust deed and
with the wish it expressed that the trust property should primarily be
devoted to providing a meeting place for Christians’ were found not to
be an institution.
174 In Minister of National Revenue v. Trusts and
Guarantee Co Ltd [1939] 4 All ER 149; [1940] AC 138 at 150 the
Privy Council said:
The trust with which the present appeal is concerned is an ordinary
trust for charity. It can only be regarded as a charitable institution …
if every such trust is to be so regarded, and this, in their Lordships’
opinion, is impossible.
226. For a fund to be a charitable fund it must be established for
charitable purposes. The charitable purposes must be the only
purposes for which it is established. If a fund’s deed allows it to be
applied for purposes that are not charitable it is not a charitable
fund.
175 Any objects (as distinct from powers) which, if viewed in
isolation, would not be charitable, must be either able to be read
down so as to be within one or more of the charitable objects,
‘severed’ under State legislation (see paragraph 228 of this Ruling),
or merely incidental to the charitable purposes of the fund.

170 The Macquarie Dictionary , [Multimedia], version 5.0.0, 1/10/01. 171 Australian Oxford Dictionary , 1999 Oxford University Press, Melbourne Australia. 172 See Associated Provident Funds Pty Ltd v. FC of T (1966) 14 ATD 333 at 351
where it was said that in this context a fund means ‘money (or investments) set
aside and invested, the surplus income being capitalized’.
173 Trustees of the Allport Bequest v. FC of T 88 ATC 4436; (1988) 19 ATR 1335
concerned the expression ‘public benevolen t institution’, but its discussion of
‘institution’ is also relevant to t he expression ‘charitable institution’.
174 See also Douglas and Ors v. Federal Commissioner of Taxation (1997) 77 FCR
112; 97 ATC 4722; (1997) 36 ATR 532.
175 Compton and Ors v. Federal Commissioner of Taxation ( 1966) 116 CLR 233 at
248. See, however, paragraphs 219 and 220 of this Ruling.

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227. The purpose of a charitable fund is found by reference to the
terms of its constituent document s and any relevant legislation.
Because of this, the activities carried on by the trustees subsequent
to establishment are not relevant to establishing whether a fund is a
charitable fund.
176 In this respect, charitable funds are different from
charitable institutions as the activities of an institution can be relevant
in determining its purpose. Nonetheless, the activities of a charitable
fund are relevant for the purposes of income tax exemption because
the fund must be applied for the purposes for which it was
established.
177 Accordingly, if a fund is not being applied for its
charitable purposes (for example it is being used to provide private
benefits to the trustee’s family), it would continue to be a charitable
fund but it would fail to qualify for income tax exemption.
178
228. Each of the Australian States regulates the operation of trusts
in their jurisdiction through Trust legislation. All State jurisdictions
have legislation which may in effect ‘sever’ any non-charitable
purposes from a mixed purpose trust to leave a valid charitable trust
in respect of charitable purposes only.
179 These trusts are generally
able to access Commonwealth taxation concessions on a basis of
being endorsed as charitable funds (as long as the funds are applied
only to the charitable purposes).
229. New South Wales, Victoria, Queensland and Western
Australia also have legislation which may allow a trust to be
considered a charitable trust for the purposes of the law of the
particular State even though it can benefit non-charitable deductible
gift recipients (not all deductible gift recipients are charitable in the
legal sense – for example, government public hospitals are not
charities).
180 A trust that is considered charitable for state law
purposes under these provisions will not be charitable for the
purposes of Commonwealth taxation law. However, if the trust is
covered by Item 4.1 of the table in section 50-20 of the ITAA 1997, it
can generally be endorsed as an Income Tax Exempt fund
181 and if it
is it will have access to most Commonwealth taxation concessions.

176 Douglas and Ors v. Federal Commissioner of Taxation (1997) 77 FCR 112 at 119;
97 ATC 4722 at 4727; (1997) 36 ATR 532 at 538.
177 Sections 50-5, 50-57, 50- 60 and 50-72 of the ITAA 1997. 178 See Taxation Ruling TR 2000/11. 179 Charities Act 1978 (Vic) section 7M; Trusts Act 1973 (Qld) section 104; Charitable
Trusts Act 1993 (NSW) subsection 23(1); Trustee Act 1936 (SA) subsection
69A(1); Variation of Trusts Act 1994 (Tas) subsection 4(3); Trustees Act 1962
(WA) subsection 102(1).
180 South Australia has similar, but more limited, legislation. 181 An income tax exempt fund (ITEF) is a non-charitable fund established by will or
instrument of trust solely for the purpose of providing money, property or benefits
to income tax exempt deductible gift recipients (DGRs) covered by item 1 of the
table in section 30-15 of the ITAA 1997, or for establishing DGRs.

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230. A fund that can accumulate investment income can still be
charitable. However, the ability to accumulate significant amounts or
to accumulate for extended periods may not be consistent with a
charitable purpose, and actual accumulation of significant amounts or
for extended periods may cast doubt on whether the fund can satisfy
the endorsement requirements.
182

Purposes which are not charitable
The purpose is to confer private benefits
231. Leaving aside the relief of poverty (see paragraph 137 of this
Ruling), a charitable purpose must be for the public benefit, or a
section of the public. This requirement is explained from
paragraph 136 of this Ruling. Particular features of an institution or
fund that can affect whether the public benefit requirement is satisfied
include: where the owners or members of an institution can receive
distributions from the institution; where the institution is run for the
benefit of its members; where benefits are provided to individual
entities rather than to the public; and where benefits are provided to
people who are simply customers, contributors or subscribers.
232. However, the existence of private benefits that are merely
incidental or ancillary to a public benefit will not by itself affect the
charitable classification of a purpose.

Distributions to owners or members
233. An institution is not charitable if it is carried on for the purpose
of private profit or gain to particular persons including its owners or
members. This is known as the not for profit requirement. If an
institution is carried on for the private profit of its owners or members,
it is carried on for their benefit and not for the benefit of the
community. This is the case irrespective of the number of owners or
members, or whether charitable consequences flow from the
institution’s activities. Thus, for example, a hospital that is operated
for the purpose of distributing dividends to its private shareholders
would not be a charitable institution despite providing care for the
sick.
183
182 See Taxation Ruling TR 2000/11 at paragraph 21. 183 Re Smith’s Will Trusts; Barclays Bank Ltd v. Mercantile Bank Ltd and Ors [1962] 2
All ER 563 at 567.

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234. The distinction between private profit and public benefit was
commented on by Else-Mitchell J in McGarvie Smith Institute v.
Campbelltown Municipal Council [1965] NSWR 1641. In the course of
considering whether the fact that the Institute sold vaccines it
developed as a result of its research into animal disease meant it
could not be charitable, he noted that many charitable institutions
engaged in commercial transactions and said at 1647:
Each such institution, provided it is carrying out one of the four
classes of public purposes which are regarded as charitable in a
legal sense, is none the less a charity and the fundamental reason
why it is so treated is that there is no element or prospect of private
profit. This, of course, is simply another way of saying that the trust
or institution which is charitable has been created or established not
with private persons or entrepreneurs as beneficiaries but with the
object of benefiting the public genera lly; in other words the objects of
the trust or institution are purposes, not persons.
235. Institutions use various mechanisms to ensure they are not
entitled to be carried on for the purposes of private profit or gain. The
most common way is to include clauses in the constituent documents
that prevent the institution from distributing its profits or assets for the
benefit of particular persons while it is operating and on winding up
(commonly called the ‘non-profit’ or ‘not for profit’ clauses). The courts
have tended to regard these clauses as an essential aspect of the
constituent documents.
236. For example, in Cremation Society of Australia Ltd v.
Commissioner of Land Tax (NSW) [1973] 2 NSWLR 704 (Cremation
Society ), the Supreme Court of New South Wales considered
whether a company limited by shares was exempt from land tax
under the Land Tax Management Act 1956 (NSW). The legislation
exempted land owned, used and occupied for a public cemetery or
crematorium from land tax. The company conducted a crematorium
on land that it owned. In support of its contention that it operated a
public crematorium, the company argued that there was no element
of private profit in the conduct of its activities: although it was a
company limited by shares, all its shares were held by a company
limited by guarantee whose memorandum of association stated that
dividends received could not be applied or distributed for any purpose
other than the provision for the benefit of the public of cremation
facilities. The Supreme Court did not accept that this meant there was
no element of private profit in the activities of the Cremation Society
of Australia Ltd. Else-Mitchell J said at 707:
… in the absence of some provision in the memorandum or articles
of association of the appellant or t he declaration of some trust by it
or its directors in respect of the subject land, I am unable to accept
the submission that the element of private gain has been excluded.
The fact that the appellant is a company with a share capital which
makes profits and distributes thos e profits as dividend to its
shareholder must…be regarded as predominant and the restrictions
on the dividends in the hands of the shareholder must be
disregarded as irrelevant.

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237. In the decision of the Supreme Court of South Australia in
Repromed Pty Ltd v. Lucas and Anor (2000) 76 SASR 575
(Repromed ), one of the issues considered by Debelle J was whether
an incorporated proprietary company was an employer that provided
health services ‘otherwise than for the purpose of profit or gain’. He
referred to Theosophical Foundation Pty Ltd v. Commissioner of Land
Tax (1966) 67 SR(NSW) 70, where Sugerman JA had considered the
meaning of the phrase ‘not carried on for pecuniary profit’ for the
purpose of land tax exemption. Debelle J considered that the intent
and meaning of the expression ‘otherwise than for the purpose of
profit or gain’ was the same as ‘not carried on for pecuniary profit’ and
at paragraph 35 referred with approval to Sugerman JA’s comments
that:
The object is to accord exemption to those… whose profits, if any,
are applied to the advancement of their objects and cannot find their
way into the pockets of individuals. For instance, it is not, I think,
required that a club, in order to gain exemption, should be carried on
at a loss as regards its trading activi ties with its members or the paid
services which it renders them, or should refrain from such activities
and from charges to its members and rely for its support entirely
upon membership subscriptions and donations.
184
238. Debelle J concluded that an employer could not satisfy the
requirement that it provide health services other than for the purpose
of profit or gain if its constituent documents did not provide that profits
could not find their way into pockets of individuals. Repromed Pty
Ltd’s constituent documents did not contain this constraint, so it could
not satisfy this requirement. It did not matter that in the circumstances
of the case, the ultimate beneficiary was in fact an educational
institution.
239. Following the decisions in cases such as Cremation Society
and Repromed , the constituent documents of a charitable institution
should in most cases include appropriate clauses to constrain private
profit. The ATO does not prescribe any form of words for this,
because different institutions will have various legal and other
requirements, besides charity status, affecting them.
240. In limited circumstances, it may be accepted that an institution
is not for private profit even if its constituent documents do not
contain these clauses. Examples are where a corporation is formed
by statute and its provisions make the not for private profit nature
clear, or where a trust is established by deed or will providing that the
property can be used for charitable purposes only.
241. An institution’s actions must be consistent with a prohibition
on the institution’s funds and assets finding their way to particular
persons such as owners, their associates or nominees, or members,
in a private capacity. Such distribu tions – whether made directly or by
indirect means – are inconsistent with the institution not being carried
on for the purpose of private profit or gain.

184 Theosophical Foundation Pty Lt d v. Commissioner of Land Tax (1966) 67 SR
(NSW) 70 at p 85.

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242. However, distributions of profits (or the potential for
distributions of profits) from a commercial activity to owners or
members will not always result in a private benefit to the owner or
member. In Word Investments the High Court concluded that a
company limited by guarantee that gave its profits to a Christian
missionary organisation and other similar organisations was a
charitable institution. The recipients were not actually members of the
company, but were closely related. The High Court held that an
institution could be charitable even where it did not engage in
charitable activities itself but instead made profits that were directed
to charitable institutions which did engage in charitable activities. It
said that no distinction should be drawn between a company limited
by guarantee with charitable objects that operated two divisions to
effect its charitable purpose, and a company limited by guarantee that
had the same objects and made the same profits as the first but gave
those profits to other organisations which spent them on those
objects.
185
243. On the basis of the decision in Word Investments, critical
questions in circumstances similar to those considered in that case
are whether the institution has charitable as opposed to purely
commercial objects, and whether the application or distribution of
profits is in furtherance of those charitable objects. The fact that the
recipient could be an owner or member of the institution does not
alter the characterisation of the institution as long as:
• the sole
186 purpose of the institution making the
distribution is charitable;

• its constituent documents allow it to distribute its
surplus or profit to another entity or entities in order to
effect that sole
187 charitable purpose; and
• its constituent documents restrict potential recipients of
the surplus or profit to charitable entities that have a
similar charitable purpose as the institution itself.

In these circumstances, the Commissioner will accept that the
distribution of profit is not for the private benefit of the members or
owners but for the benefit of the public generally.
188

185 Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 37. 186 See paragraph 5 of this Ruling. 187 See paragraph 5 of this Ruling. 188 As charitable organisations with a company structure are commonly public
companies limited by guarantee, it is likely that this position will have limited
application, particularly given that the Corporations Act 2001 has been amended
to provide that a company limited by guar antee that is incorporated on or after 28
June 2010 cannot pay dividends to its members (section 254SA of the
Corporations Act 2001 ). As pointed out by the High Court in Federal
Commissioner of Taxation v. Cappid Pty Ltd (1971) 127 CLR 140; 71 ATC 4121;
(1971) 2 ATR 319 companies limited by shares which are trading for profit are
generally carried on for the purpose of the pr ofit or gain of their owners (CLR at
155; ATC at 4124; ATR at 323).

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244. However, as noted at paragraph 200 of this Ruling, an
institution that carries on commercial activities will not be charitable
simply because it distributes some or all of its profits to an entity that
is a charitable institution.
189 For example in both Cremation Society
and Repromed , the non-profit character of the ultimate recipient of the
profits did not determine the character of the entity itself.

Benefits for members
245. A charitable institution does not lose its character simply
because its members may benefit when it carries out its purpose.
However, if an institution is set up to advance the interests of its
members it cannot be charitable. It lacks the required public benefit
element as its members do not, as members, constitute a section of
the public in the relevant sense.
190 Professional or occupational
associations are unlikely to be charitable, 191 but this is not invariably
the case. 192
246. A purpose of providing benefits to members does not become
charitable simply because a motivation of the institution has some
social value or, as a consequence of the institution’s activities, some
indirect benefit to the community occurs.
193 Nor does making
members’ services available to pay ing customers (for example, to
attend courses or use a library) result in a members’ organisation
being charitable.

189 See also Commissioner for ACT Revenue Collect ions v. Council of the Dominican
Sisters of Australia 91 ATC 4602; (1991) 22 ATR 213. Cremation Society of
Australia Ltd v. Commissioner of Land Tax (NSW ) [1973] 2 NSWLR 704.
190 In re Income Tax Acts (No. 1) [1930] VLR 211. 191 Re Mason (deceased) [1971] NZLR 714 (law society); Re Mead’s Trust Deed;
Briginshaw and Ors v. National Society of Operative Printers and Assistants and
Anor [1961] 2 All ER 836 (trade union); Society of Writers to Her Majesty’s Signet
v. Commissioners of Inland Revenue (1886) 14 Court Sess Cas (4th Series) 34
(law association); Sulley (Surveyor of Taxes) v. Royal College of Surgeons,
Edinburgh (1892) 3 Tax Cas 173 (surgeons’ association); The Honourable
Company of Master Mariners v. The Commissioners of Inland Revenue (1932) 17
TC 298 (master mariners association); Institution of Professional Engineers New
Zealand Inc. v. Commissioner of Inland Revenue [1992] 1 NZLR 570 (engineers
association).
192 See paragraph 247 of this Ruling. 193 Situations such as these can be contrasted with Ziliani; see paragraph 213 of this
Ruling.

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247. Where a purpose is primarily for the benefit of the community
and not for the benefit of members, the placing of limits on
membership of an organisation should not ordinarily preclude a
finding that the institution is charitable. The nature of the institution’s
purpose could itself explain limits on its membership. For example, in
The Commissioners of Inland Revenue v. Forrest [1890] 15 AC 334,
an engineering association generally limited its membership to
practising civil engineers. Nonetheless, it was held to be for the
promotion of science as its activities promoted science and were not
directed to advancing the members’ interests. Limiting membership to
engineers was appropriate because they were the only persons
possessing the knowledge and practical experience requisite for the
efficient promotion of the purpose.
194 Similarly, in Victorian Women
Lawyers , 195 an association with the principal purpose of removing
barriers and increasing opportunities for women in the legal
profession in Victoria was accepted as a charitable institution, even
though eligibility for ordinary membership of the association was
restricted to persons admitted to practice or Law graduates.
248. Where an institution that is set up to advance its members’
interests establishes an entity to carry out charitable activities, it is
that entity, rather than the members’ institution, that must be for the
public benefit. The fact that the separate entity is established and
controlled by the members’ institution does not prevent this.
249. In Re Australian Institute of Management (Vic) and
Commissioner of State Revenue (Vic) 9 VAR 222; 95 ATC 2179, the
Victorian Administrative Appeals Tribunal considered whether a
training college established by the Australian Institute of Management
(Vic) to carry out the educational activities the Institute had previously
undertaken was established for educational purposes or as a support
organisation for the benefit of its members. The constitution of the
College provided that the affairs of the College were to be managed
by a Committee of Trustees appointed by the Institute, comprised of
office bearers of the Institute. In concluding that the College was
established for educational purposes, the Tribunal considered factors
such as the availability of the College’s services to non-members, the
objects of the College, the extent to which additional benefits
available to members were actually used, and the Institute’s access
to the College’s income and property. In College of Law (Properties)
Pty Ltd v. Willoughby Municipal Council (1978) 38 LGRA 81 a College
that conducted pre and post admission courses for the legal
profession was accepted as having charitable purposes even though
the College benefited solicitors who were all (at the time) members of
the Law Society of NSW, had been established pursuant to a
resolution of the Law Society of New South Wales, and had a director
and a board of governors appointed by the Law Society.

194 Similar considerations arose in Royal Australasian College of Surgeons v. Federal
Commissioner of Taxation (1943) 68 CLR 436; (1943) 7 ATD 289.
195 (2008) 170 FCR 318; [2008] FCA 983.

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250. Based on the reasoning in the cases referred to in
paragraph 249 of this Ruling, an entity established by an institution
set up to advance its members interests can be accepted as being for
the benefit of the community where:
• it has a separate identity to the members’ institution;
• its income and property are not to be appropriated for
individuals or for the members’ institution while it is
carried on or upon winding up;
• its activities are charitable; and
• the services it provides are not limited to members of
the members’ institution, and the availability of those
services is effectively made known beyond that
membership.

Benefits for individual entities that may not be members of an
organisation.
251. Community and economic development, and the
advancement of industry, commerce or agriculture can be charitable
purposes,
196 but particular care is needed where carrying out such
purposes allows an institution to promote the interests of and benefit
individual entities. The purpose of the institution must be within the
spirit and intendment of the Statue of Elizabeth, and must be for the
public benefit. If benefiting and promoting the interests of individual
entities can be construed as an independent purpose of the
institution, the institution cannot be charitable.
252. For example, in Commissioners of Inland Revenue v. Oldham
Training and Enterprise Council (1996) 69 TC 231,
197 the Council
provided various services to businesses, persons intending to set up
businesses and trainees with a view to improving employment
prospects in the area. The Court noted that the relief of
unemployment was a charitable purpose. However, it found that the
purposes of the Council were not who lly charitable, regardless of any
beneficial consequences for employment, because they included an
independent purpose of promoting the interests of individuals
engaged in trade, commerce or enterprise and providing benefits and
services to them.

196 See eg Commissioners of Inland Revenue v. Yorkshire Agricultural Society [1928] 1 KB 611; Crystal Palace Trustees v. Minister of Town and Country Planning
[1950] 2 All ER 857 and the examples in paragraph 337 of this Ruling.
197 See also Pigs Marketing Board (Northern Ir eland) v. Commissioners of Inland
Revenue (1945) 26 TC 319.

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253. Similarly, in Canterbury Development Corporation v. Charities
Commission [2010] 2 NZLR 707 ( Canterbury Development ) the High
Court of New Zealand held that a corporation that sought charitable
status on the basis that it promoted the economic development of
Canterbury was not charitable because the corporation’s pursuit of its
objects was focussed on the development of individual businesses.
The fact that the corporation believed the economic success of these
businesses would be reflected in the economic well being of the
Canterbury region did not alter the outcome.

254. In contrast, a Foundation whose main object was ‘the promotion
of a culture of innovation and entrepreneurship’ was accepted as
charitable in Commissioner of Taxation v. The Triton Foundation 147
FCR 362; [2005] FCA 1319 ( Triton). The Foundation undertook broad
instructional programs (school support, publicity and media exposure,
self-assessment tools for inventors, and seminars), and also visibly
assisted selected innovators to commercialise their ideas, selecting
applicants to receive ‘resource-intensive help’ with commercialisation.
The Court was satisfied that the Foundation’s services were available
to the public without discrimination, and the selection of inventors ‘
who
were likely to be the best exemplars of innovation’ was rational in
keeping with the Foundation’s main object of promoting an innovative
and entrepreneurial culture ‘to the public at large’.
198
255. The decision of the Federal Court in Tasmanian Electronic
Commerce Centre Pty Ltd v. Commissioner of Taxation [2005] FCA 439;
(2005) 147 FCR 362 ( Tasmanian Electronic) was to a similar end. The
Tasmanian Government had established a regional telecommunications
infrastructure fund to provide funding for regional, rural, and remote
communities, to identify their communications needs, and to develop
projects to meet these needs. The Tasmanian Government and a
University sought funding for an electronic commerce centre (TECC) to
help Tasmanian industries to establish themselves in the international
electronic marketplace, to research and develop information systems
and business infrastructure to help enterprises enhance and transform
their business practices, and to accelerate the adoption of electronic
commerce by Tasmanian industry. The Federal Court held that TECC
was charitable. Heerey J said at 31:
Once it is accepted that assistance to business and industry can provide
a public benefit of the kind which the law recognises as charitable, a
proposition which does not seem to be in dispute in the present case, I do
not see how the fact that individual businesses may benefit can be a
disqualifying factor. On the contrary, if business in general is assisted, it
seems inevitable that some firms at least will become profitable, or more
profitable, as a result of that assi stance. There would be no point in the
exercise if this were not the case. It would be an odd result if an
institution established to benefit busin ess could only qualify as a charity if
the recipients of its benefits made losses or did no more than break even.
It seems to me self-evident that benefits to Tasmania’s economy resulting
in long-term economic advantage to Tasmania will be a benefit to the
Tasmanian public, and indeed to the wider national public.
198 See also Tasmanian Electronic Commerce Cent re Pty Ltd v. Commissioner of
Taxation (2005) 142 FCR 371; 2005 ATC 4219; (2005) 59 ATR 10.

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256. In Re Queenstown Lakes Community Housing Trust [2011] NZHC 617 ( Queenstown Lakes ), the High Court of New Zealand
reviewed the decisions in Canterbury Development, Tasmanian
Electronic and Triton. Mackenzie J agreed with the proposition that ‘a
gift which provides a private benefit conferred on a private business
which ultimately it is hoped might benefit a community is not a
charitable purpose’,
199 but then said at paragraph 67:
…In both [Triton and Tasmanian Electronic] the proposition that
assistance to business and industry can provide a public benefit
which the law recognises as charitable was accepted. That
proposition is clearly correct… Howeve r, it is not the case that every
assistance to business and industry which does provide a public
benefit will be charitable. The question is whether the particular form
in which that assistance is provid ed falls within the fourth head of
charity. The fact that the assi stance is provided by means of
assistance to individual businesses may preclude a finding of
charity… I do not consider that …Tasmanian Electronic is to be
taken as authority for the proposition that the fact that assistance to
business and industry is provided in a way by which individual
businesses benefit can never be a disqualifying factor. The way in
which the assistance is provided is an essential aspect of the inquiry
into whether the purpose is charitable or not. In both Triton and
Tasmanian Electronic, the assistance to individual businesses was
provided in the form of advice an d assistance with specific aspects
of the business. In Canterbury Deve lopment Corporation, the pursuit
of the objects was focused on the development of individual
businesses, done in the hope and belie f that their economic success
would be reflected in the economic wellbeing of the Canterbury
region. That distinction between these authorities is crucial.
257. An institution that merely provides benefits to customers,
contributors or subscribers in return for payment lacks the necessary
public character. Examples of non-charitable purposes include a
savings bank run for the benefit of depositors,
200 a non-profit
company operating a licensed hotel premises, 201 a company fund set
up to remedy air-raid distress for employees who subscribed to it, 202 a
company fund to which all employees subscribed for work injuries,203
a company providing medical services to subscribers, 204 and a
friendly society for girls educated at a particular school.205

199 Queenstown Lakes [2011] NZHC 617 at paragraph 57
200 The Hobart Savings Bank and The Launceston Bank for Savings v. Federal
Commissioner of Taxation (1930) 43 CLR 364 at 370.
201 Case No 92 12 TBRD 749 and cf Renmark Hotel Inc v. Federal Commissioner of
Taxation ( 1949) 79 CLR 10 where ‘charity’ wa s not argued before the High Court.
202 Re Trusts of Hobourn Aero Components Ltd’s Air Raid Distress Fund; Ryan and
Ors v. Forrest and Ors [1946] 1 All ER 501.
203 Doust v. Attorney-General (1904) 4 SR (NSW) 577. 204 Re Windsor Medical Services Inc (1971) 2 OR 141. 205 Braithwaite v. Attorney-General [1909] 1 Ch 510. See also Cunnack v. Edwards
[1896] 2 Ch 679.

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Incidental or ancillary private benefits
258. Private benefits that are no more than incidental or ancillary to
a purpose of benefiting the community do not detract from the
charitable status of an institution.
206 Benefits are incidental if they are
a minor by-product of activities undertaken to carry out the
institution’s purpose. They are ancillary if they are conferred only as a
means of achieving an institution’s charitable purpose.
207 The greater
the scope to provide private benefits, the greater the concern that the
purpose is not to benefit the public, but to provide those private
benefits.
259. In Commissioners of Inland Revenue v. White and Ors and
Attorney-General (1980) 55 TC 651, an association’s main objects
were to advance and encourage craftsmanship in ancient and
modern crafts. Its principal activities were the conversion and
maintenance of two workshops for craftsmen including a clock maker,
silversmith, bookbinder and diamond mounter. The craftsmen were
not necessarily members of the association. The motive for this
endeavour came about because of increasing pressure from property
developers to convert areas traditionally occupied by some of the
best craftsmen in the London area into office premises. The view of
the founders of the association was that there would be considerable
loss to the community if craftsmen were forced to leave the area. In
the particular circumstances of the association, the court found the
association’s purposes were charitable, with any benefits to the
craftsmen merely incidental.
260. In Victorian Women Lawyers ,
208 the fact that members of the
association may have benefitted from some of its activities did not
prevent it from being accepted as a charitable institution. French J
said at paragraph 149:
The activities of the association, including the social and networking
functions, may have benefited its members. They were, however,
plainly directed to the larger object and in many cases to a larger
audience, the legal profession in Victoria. They were in aid of the
principal objective.

206 In Victorian Women Lawyers (2008) 170 FCR 318; [2008] FCA 983 , French J
stated at paragraph 149 t hat the ‘…activities of the a ssociation, including the social
and networking functions, may have benefit ed members. They were, however,
plainly directed to the larger object and in many cases to a larger audience, the
legal profession in Victor ia. They were in aid of the principal objective…’.
207 Bona fide remuneration for services provided (say, as an employee, contractor,
office-holder or consultant) would not, of course, be inconsistent with a charitable
purpose. Also, there may be a common c haritable purpose among an organisation
and its members. For example in Ziliani (1985) 56 LGRA 58 a council was formed
by agricultural show societies (which were themselves charities). The council
provided a range of services to the member societies, protecting their interests,
and operating services ‘on a mutual and co-operative basis in respect of matters
of uniform concern’ to them including a rain protection scheme and an accident
fund. The council was held to be a char ity. Its integration in the charitable
purposes of the member societies demons trated its charitable purpose. The
council was not operated to promote anyone ’s private, non-charitable, interests.
208 See paragraph 146 of this Ruling.

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Member benefits provided by an open and non-discriminatory
self-help group.
261. Because a charitable institution that falls within the definition
of ‘open and non-discriminatory self-help group’ in the Extension of
Charitable Purpose Act 2004 is deemed to be for the public benefit,
the fact that its members are likely to benefit in more than an ancillary
or incidental way will not affect the charitable status of the institution.

The purpose is social, recreational or sporting
262. A purpose that is essentially social in nature is not charitable.
Examples of institutions that have been held to have a purpose that is
essentially social in nature are an institute to give social and other
amenities to Welsh people in London,
209 a community centre
providing for the cultural and social needs of Latvians in
Melbourne,
210 and a hostel for entertaining distinguished foreign
visitors. 211
263. This conclusion is not altered by the fact that those concerned
with the workings of an association have religious motives or
sentiments.
212 Thus, a bequest for the establishment of a Roman
Catholic boys club was not charitable. 213 The fact that the club may
have been inspired by religious motives or would be frequented by
persons of the same religion did not change its essential nature of
being a social club. Another example is a Girls’ Friendly Society for
women and girls who accepted the Christian faith.
214
264. A social element does not detract from a charitable purpose if
it is merely incidental. In Barralet and Ors v. Attorney-General and
Ors [1980] 3 All ER 918, a society whose objects were ‘the study and
dissemination of ethical principles and the cultivation of a rational
religious sentiment’ was held to be a charity because it advanced
education and moral improvement in society. It conducted minor
social activities similar to the social activities of the congregation of a
parish church. These activities were described by Dillon J as
ancillary, and he stated:
At the highest it can be said that they serve, as with the parish
church, to further the esprit de corps of the congregation, and this in
turn helps to further the cultivation of the rational religious sentiment.
209 Trustees of Sir Howell Jones Williams’ Trusts v. Inland Revenue Commissioners
[1947] 1 All ER 513.
210 Latvian Co-operative Society Limited v. Commissioner of Land Tax (Vic) 3 VAR
242; 89 ATC 2042; (1989) 20 ATR 3641.
211 Re Corelli (deceased); Watt and Ors v. Bridge and Ors [1943] 2 All ER 519. 212 Keren Kayemeth Le Jisroel Limited v. Commissioners of Inland Revenue [1932] AC 650 at 657.
213 Attorney-General v. Cahill and Ors [1969] 1 NSWR 85. 214 Re Wilson’s Grant; Fidelity Trustee Co Ltd v. Johnson [1960] VR 514.

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265. A recreational or sporting purpose is also not a charitable
purpose, even if it may result in some benefit to the community. 215
The following purposes have not been accepted as charitable: a cup
to encourage the sport of yacht racing,
216 associations for rowing,
swimming and amateur athletics, 217 cricket, 218 the sport of polo, 219
breeding of pigeons for racing, 220 angling, 221 fox-hunting 222 and horse
racing. 223
266. An institution that promotes an activity that is sporting or
recreational in nature can still be charitable if the activity is simply a
means by which a broader charitable purpose is achieved. In Bicycle
Victoria Inc v. Federal Commissioner of Taxation [2011] AATA 444,
an association with objects of promoting fitness and well being by
encouraging cycling in all its forms was accepted as charitable. The
association ran behavioural change programmes including the Over
50s Riding Program and the Women’s Cycling Program, promoted
cycling as an activity and lobbied for the development of facilities for
cycling. The Tribunal held that a purpose of promoting cycling in all its
forms for the overall purpose of promoting fitness benefitted the
general community, and was charitable.
267. A sporting or recreational element does not detract from a
charitable purpose if it is merely incidental.
224 In Re Mariette; Mariette
v. Aldenham School Governing Body [1914-15] All ER Rep 794
bequests were made to a school for the building of squash racket
courts or fives courts and to provide prizes for school athletics. These
were accepted as charitable on the ground that the development of
body as well as mind was integral to the students’ schooling. The
sporting or recreational elements formed an integral part of the
carrying on of the charitable purpose.

215 See for example Chief Commissioner of State Re venue v. Northern NSW Football
Ltd (RD ) [2010] NSWADTAP 28.
216 Re Nottage; Jones v. Palmer [1895-9] All ER Rep 1203; [1895] 2 Ch 649. Also
Said v. Barrington [2001] NSWSC 576 for trophies for youngsters sailing.
217 Laing v. Commissioner of Stamp Duties [1948] NZLR 154. 218 Re Patten; Westminster Bank v. Carlyon [1929] All ER Rep 416. 219 Strathalbyn Show Jumping Club Inc. v. Mayes and Ors [2001] SASC 73. 220 The Royal National Agricultural and Industrial Association v. Chester and Ors
(1974) 48 ALJR 304.
221 Re Clifford; Mallam v. McFie [1911-13] All ER Rep 1284. 222 Peterborough Royal Foxhound Show So ciety v. Commissioners of Inland
Revenue [1936] 1 All ER 813.
223 Re Hoey [1994] 2 Qd R 510. 224 Lloyd and Anor v. Federal Commissioner of Taxation (1955) 93 CLR 645 at 665.

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268. Sporting or recreational purposes and activities might also be
incidental to rehabilitation and for promoting the efficiency of the
armed forces. However, any integration must be clear; it cannot be
presumed.
225 The argument that ordinary rifle and pistol clubs are
charitable because they promote the defence of the nation is not
accepted. Their main purpose is sporting or recreational; any link to
promoting the defence of the nation is too remote. The decision in In
re Stephens; Giles v. Stephens [1892] 8 TLR 792, which held that a
bequest to the English National Rifle Association was charitable
because of the bequest’s particular links to national defence, is not
applicable to ordinary rifle and pistol clubs.
226

The purpose is illegal
269. If a purpose is either unlawful or a lawful purpose is to be
carried out by unlawful means it is not charitable.
227 For example, a
school for thieves might, in a sense, advance education, but it is not a
charitable institution.
228
270. The issue turns on purpose. The mere fact that an institution
or its employee has breached a law would not, in itself, show that the
institution has a non-charitable purpose. Instances of illegality in
relation to occupational health and safety, employee entitlements and
regulatory requirements would be unlikely to point towards a
non-charitable purpose. Toward the other extreme would be a
planned and coordinated campaign of violence.
229

225 Inland Revenue Commissioners v. City of Glasgow Police Athletic Association
[1953] AC 380 at 391.
226 For the similar approach of the Charity Commissioners for England and Wales, see Decisions of the Charity Commissioners Vol. 1 (August 1993) 4-13.
227 Auckland Medical Aid Trust v. Commissioner of Inland Revenue [1979] 1 NZLR
382 at 395.
228 Re Pinion (deceased); Westminster Bank Ltd v. Pinion and Anor [1964] 1 All ER 890 at 893; [1965] Ch 85.
229 For examples, see our document Charities – if unlawful actions occur at
www.ato.gov.au/nonprofit.

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The purpose is commercial
271. If an institution has a purpose of carrying on a commercial
enterprise to generate surpluses as an end in itself, it cannot be
charitable. In Re Smith (deceased); Executor Trustee and Agency
Co. of South Australia Ltd v. Australasian Conference Association
Limited [1954] SASR 151 ( Re Smith (deceased)) a purpose of
carrying on the manufacture and sale of vegetarian foods was
contrasted with a charitable purpose:
On the one hand there is the establishment and conduct of
sanatoriums, hospitals &c., whic h is unquestionably a charitable
purpose. But on the other hand there is the establishment and
conduct of a business for the manufacture and sale of health foods,
which prima facie is a commercial and not a charitable purpose …
The motive behind the establishment of the Health Food Company
was no doubt religious and its profits were no doubt used exclusively
in aid of its teachings, activities and purposes of a religious body, but
according to the decision in Lawlor’s case,
230 those considerations
would not make the establishment and conduct of the Health Food
Company a charitable purpose within the spirit of the Statute of
Elizabeth.
231
272. The motives of the founders of an organisation could be
relevant to determining its purpose, but will not be sufficient to convert
what is, in light of all the other circumstances, simply a commercial
purpose into a charitable purpose.
232

230 The Roman Catholic Archbishop of Mel bourne v. Lawlor and Ors; His Holiness
the Pope v. National Trustees, Executor s and Agency Company of Australasia
and Ors (1934) 51 CLR 1.
231 Re Smith (deceased); Executor Trustee and Agency Co. of South Australia Ltd v.
Australasian Conference Association Limited [1954] SASR 151 at 159-160. In this
case the court did not need to apply these principles to make a finding on the
general charitable character of the compan y involved, given its decisions on other
aspects of the litigation.
232 See the comments of Beaumont J in Cronulla Sutherland Leagues Club Limited v.
Commissioner of Taxation (1990) 23 FCR 82 at 116; 90 ATC 4215 at 4243; (1990)
21 ATR 300 at 331 and Re Smith (deceased); Executor Trustee and Agency Co.
of South Australia Ltd v. Australa sian Conference Association Limited [1954] SASR 151 at 159-160.

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273. Re Smith (deceased) was considered by the Full Federal
Court in Federal Commissioner of Taxation v. Word Investments Ltd
(2007) 164 FCR 194; [2007] FCAFC 171.
233 Allsop J (Stone J
agreeing) distinguished the facts in Re Smith (deceased) from those
the Full Federal Court were considering. He noted in particular that
the Court in Re Smith (deceased) had accepted that the relevant
memorandum provided for both charitable and non-charitable
purposes whereas Word Investments Limited had only one purpose
and that was a charitable purpose. He did not comment on whether
Re Smith (deceased) should have been decided differently. He said
at paragraph 27:
There was no doubt that the motive behind the establishment of the
healthy food company was religious …There was no doubt that the
profits were, in fact, used exclusively in aid of the teachings ,
activities and purposes of a religious kind. But the
purposes…included all the purpo ses – the charitable purposes
(building hospitals and sanat oriums) and the non-charitable
purposes (manufacturing and selling health foods). The
memorandum did not restrict the us e of the profits to the charitable
purposes. Ligertwood J saw the gov erning instrument as permitting
activities (that is purposes) wider than those which were capable of
being characterised as charitable.
274. However, the conduct of activities which could be described
as commercial or business-like can be compatible with a charitable
purpose.
275. The issue turns on purpose .
234 An institution undertaking
commercial or business-like activities can still be charitable if:
• the sole
235 purpose of the institution is charitable and it
carries on a commercial enterprise to generate
surpluses in order to further that charitable purpose.
For example, in Word Investments the High Court
accepted that a company had the charitable purpose of
advancing religion even though it carried on an
investment business and a funeral business. The High
Court concluded that the company carried out its
business activities to further its charitable purpose,
rather than as an end in itself. The fact that the
activities undertaken by the institution were not
intrinsically charitable did not affect the
characterisation of the institution as charitable;

233 The decision In re Smith (deceased) was not considered by the High Court in the
subsequent appeal ( Word Investments (2008) 236 CLR 204; [2008] HCA 55).
234 See from paragraph 186 of this Ruling for factors relevant to determining purpose. 235 See paragraph 5 of this Ruling.

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• the sole 236 purpose of the institution is charitable and
the commercial activities directly carry out the
charitable purpose. For example, an institution that
conducts a business activity solely for the purpose of
providing training and employment opportunities for
people suffering from disabilities who would otherwise
find it difficult to obtain training and employment;
• the commercial operations are merely incidental to the
carrying out of the charitable purpose. Examples from
the cases are a home for neglected boys that also
provided training through its farm
237 and the promotion
of temperance through the running of a canteen; 238 or
• the activities undertaken by the institution are
themselves intrinsically charitable but are being carried
on in a way that is commercial. Examples from the
cases are the preparation and sale of law reports,
239
the manufacture and sale of animal vaccines, 240 and
providing cremation services. 241
276. In these circumstances, the fact that the institution may also
hold passive investments to receive a market return to further its
charitable purposes, or to meet reasonable operational expenses, will
not undermine its charitable status.
242
277. Where a commercial entity operates for, or is owned by, a
charity, it is not automatically charitable. It is the purpose of the entity
itself, not of the owning charity, that must be determined.
243 It is not
possible to merely attribute charitable status to an entity on the basis
that it is associated with a charity.
244 Control, ownership, the use of
surplus funds, or a trust relationship are not sufficient on their own to
change a commercial entity into a charity. This does not mean that
the extent of any relationship with a charity is irrelevant, but a simpl
e
‘look through’ approach (which ignores the features and
circumstances of the relevant institution itself) is not appropriate.
245

236 See paragraph 5 of this Ruling.
237 Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85
CLR 159.
238 Trustees of the Dean Leigh Temperance Canteen v. Commissioners of Inland
Revenue (1958) 38 TC 315.
239 The Incorporated Council of Law Reporting of the State of Queensland v. Federal
Commissioner of Taxation (1971) 125 CLR 659; 71 ATC 4206; (1971) 2 ATR 515.
240 McGarvie Smith Institute v. Campbelltown Municipal Council (1965) 11 LGRA
321.
241 Scottish Burial Reform and Cremation Society Ltd v. Glasgow City Corporation
[1967] 3 All ER 215.
242 See Word Investments (2008) 236 CLR 204; [2008] HCA 55 at paragraph 22. 243 The relevant principles are usefully devel oped, albeit in the context of pay-roll tax,
in Commissioner for ACT Revenue Collections v. Council of the Dominican Sisters
of Australia 91 ATC 4602; (1991) 22 ATR 213. In Word Investments, the fact that
the company gave its profits to closel y related charities did not determine the
company’s status: instead, the High Cour t analysed the purpose of the company
itself. An example under the Canadian income tax law is Alberta Institute on

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The purpose is governmental
278. The purposes of government in carrying out its functions are
not charitable. As such Government departments and like bodies are
not charitable institutions. They are simply performing a governmental
responsibility.

279. For example, in considering a bequest made in favour of the
Children’s Welfare Department of the Victorian State Government in
In re Cain (deceased); The National Trustees Executors and Agency
Co of Australasia Ltd v. Jeffrey [1950] VLR 382, Dean J said at 387:

In my opinion if the present gift be construed as a gift for carrying on
the ordinary activities of a Government department pursuant to a
statute, the gift is not a gift fo r charitable purposes, even if the
activities are such that if carried on by private persons they would be
charitable.
246
280. He held that the gift under consideration was a gift for
charitable purposes, as the testator had intended to benefit children
under the Department’s care in a way which was not a ‘mere relief of
Government expenditure’ but instead would provide them with ‘some
additional benefits’.
247
281. However, the fact that an organisation provides services
which may have the effect of helping to achieve government policy
objectives will not of itself indicate that the purpose of the
organisation is governmental rather than charitable.
282. In Central Bayside the High Court considered whether a
company established to help general practitioners work together to
improve patient care was excluded from being a ‘charitable body’ for
the purposes of state payroll tax exemption because of its relationship
with government. The Commissioner of State Revenue (Vic) had
denied the company exemption from payroll tax because he
considered that it was so much under the control and influence of the
government that it was actually furthering the objectives of
government, rather than pursuing its own purposes.

Mental Retardation v. The Queen [1987] 3 FC 286 where a fund-raising
corporation had been set up by an associat ion helping the mentally handicapped.
244 Discussion of a claim to effectively attribute the character of associated bodies is
provided in the land tax case of Theosophical Foundation Pty Ltd v. Commissioner
of Land Tax (NSW) (1966) 67 SR (NSW) 20.
245 See Taxation Ruling TR 2005/22 Income tax: companies controlled by exempt
entities. It should be noted that the franki ng credit provisions in Part 3-6 of the
ITAA 1997 may apply in relation to taxable for-profit companies, to provide a ‘no-
tax’ result between the company and its charity owner.
246 Note that Dean J concluded that t he gift was good on the basis that ‘the
department could develop an appropriate method of using it to benefit children
under its care in some manner not likel y to be carried into effect in ordinary
application by the Department of its grants from consolidated revenue’.
247 In re Cain (deceased); The National Trustees Executors and Agency Co of
Australasia Ltd v. Jeffrey [1950] VLR 382 at 388. Dean J also said that he was
confident the Department would be able to ‘propose an appropriate method of
using [the gift] to benefit ch ildren under its care in some manner not likely to be
carried into effect in ordinary applicati on by the Department of its grants from
consolidated revenue’.

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283. In concluding that the company was a charitable organisation,
the High Court considered whether the extent of governmental control
and influence was such that the company was carrying out the
government’s purposes rather than its own. It said at paragraph 41:
To carry out the object of the tax payer might be said to assist the
achievement of government policy, but it did not follow that the
taxpayer’s object had changed from improving patient care and
health to achieving government po licy. The taxpayer’s object of
improving patient care and health continued; all that happened was
that it had seen entry into a beneficial agreement with the
government as a means of achievi ng that object. Even if, by fulfilling
its own purpose, the taxpayer performed ‘the work or function of
government’, that did not prevent it from being a charitable body.
284. A number of cases have considered whether a body
performing functions on behalf of government could be a public
benevolent institution. Although a charity is not synonymous with a
public benevolent institution,
248 similar considerations will apply in
determining whether a body performing government functions could
be charitable.
249
285. For example, in Metropolitan Fire Brigades Board v. Federal
Commissioner of Taxation (1990) 27 FCR 279; 91 ATC 4052; (1990)
21 ATR 1137, it was held that the Metropolitan Fire Brigades Board of
Queensland was not a public benevolent institution. At FCR 280; ATC
4,054; ATR 1139 Wilcox, Spender and Pincus JJ said:
It is true that ordinary citizens and those organised into volunteer fire
brigades (the existence of such brigades being recognised in the
Fire Brigades Act) do some work of the same kind, as a matter of
civic duty. That does not detract from the appellant’s status as a
body constituted, funded and controlled by government and
performing functions on behalf of government. The notion that such
a body fulfils the description ‘public benevolent institution’ seems a
novel one.
286. The principle that a body performing functions on behalf of
government could not be a public benevolent institution was applied
in Mines Rescue Board of New South Wales v. Federal
Commissioner of Taxation (2000) 101 FCR 91; 2000 ATC 4580;
(2000) 45 ATR 85 and Ambulance Service of New South Wales v.
Federal Commissioner of Taxation (2003) 130 FCR 477; 2003 ATC
4674; (2003) 53 ATR 391.

248 See Taxation Ruling TR 2003/5 – Income tax and fringe benefits tax: public
benevolent institutions.
249 See the comments of Kirby J in Central Bayside (2006) 228 CLR 168 ; [2006] HCA
43 at paragraph 133 and 134.

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287. Where the sole 250 purpose of an institution or fund is
charitable, the fact that it relies substantially on government funding
to pursue its charitable purpose does not detract from its
characterisation as charitable,
251 provided the entity is not in effect
controlled 252 by government.

The purpose is vague, has insufficient value or is of
indeterminable value for the community
288. Any purpose that is vague or ambiguous fails to have
sufficient certainty to be characterised as charitable. Thus, in Inland
Revenue Commissioners v. Baddeley and Ors [1955] 1 All ER 525,
land was conveyed to trustees for the moral, social and physical
well-being of a community. The House of Lords held that the trust
failed for its vagueness and generality. Viscount Simonds said, at
531:
The moral, social and physical well-being of the community, or any
part of it, is a laudable object of benevolence and philanthropy, but
its ambit is far too wide to include only purposes which the law
regards as charitable.
289. Other expressions that the cases have found too vague or
imprecise include ‘philanthropic’ purposes, 253 ‘benevolent’
purposes, 254 ‘patriotic purposes’, 255 and ‘benefit maintenance and
advancement of youth’. 256
290. A purpose that has insufficient value to the community is not
charitable.
257 For example, where a testator set up a trust for the
publication of his own literary works, it was not charitable as the
works failed to have any educational value to the community.
258

250 See paragraph 5 of this Ruling. 251 See for example Central Bayside (2006) 228 CLR 168 ; [2006] HCA 43 where the
company was charitable even though more than 90% of its funding came from
Commonwealth Government grants . Callinan J also noted at paragraph 181 that
‘The appellant in this case was entirely vo luntarily established. It is not, and has
never been, part of a government department . It does not owe its existence to a
statute. It is quite separate from government. It is a matter entirely for it whether it
seeks government funds or subsidisation’.
252 For example under statute, in its constituent documents, through membership or at board level, or through the ability of a Mini ster to control activities or finances or
operations.
253 Re MacDuff; MacD uff v. MacDuff [1895-9] All ER Rep 154. 254 The Attorney-General of New Zealand v. The New Zealand Insurance Company
Ltd and Ors [1936] 3 All ER 888.
255 Attorney-General v. National Provinci al and Union Bank of England and Ors
[1924] AC 262; [1923] All ER Rep 123.
256 Re Payne (deceased) [1968] Qd R 287. 257 Re Hummeltenberg; Beatty v. London Spiritualistic Alliance [1923] All ER Rep 49. 258 Re Elmore (deceased) [1968] VR 390.

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291. Benefits that are too indeterminate for the community also do
not qualify. New Zealand Society of Accountants v. Commissioner of
Inland Revenue [1986] 1 NZLR 147 concerned statutory funds used
to compensate people for money misappropriated by a solicitor or
accountant. It was submitted that the community as a whole benefited
from the existence of the fund in that as present or potential clients
they all had the benefit of the knowledge that the fund was there as a
safeguard and a protection of their interests. This was rejected by
Richardson J who considered there was not sufficient value to the
community to find a charitable purpose. He said at 153:
That peace of mind seems to me far too nebulous and remote to be
regarded as a public benefit. Nor is it suggested that the existence of
the fund tends to promote honesty and integrity on the part of those
engaged in the public practice of law or accountancy, or that the
purpose of the trust is the moral improvement of the community. The
element of public benefit must arise if at all from the application of
the fund for the purposes of the f und and I cannot see any basis for
enlarging the community benefited beyond those persons entitled to
claim from the fund.
292. However, in Triton Kenny J considered the status of a
foundation established to promote innovation and entrepreneurship in
Australia and rejected the Commissioner’s submission that the
foundation’s objects were too vague and imprecise and the benefit to
the community (as distinct from individual investors) too remote. She
said:
Triton’s objects and activities are designed, broadly speaking, to
promote commercial activity of a particular kind, which Governments
at State and Commonwealth levels apparently regard as beneficial,
in various ways, to the inhabitants of their States and Australia. They
are, moreover, of a kind that t he law recognises as charitable.
293. If it cannot be determined whether or not a purpose will
promote the public benefit, the purpose will not be charitable. For
example, in Southwood v. Attorney General [2000] WTLR 1199;
(2000) 150 NLJ 1017, the English Court of Appeal held that a trust for
the advancement of education of the public on the subject of
militarism and disarmament was not charitable because it could not
be determined whether the trust’s object of securing peace by
demilitarisation promoted the public benefit. The Court noted that
‘there are differing views as to how best to secure peace and avoid
war’, and that ‘the court is in no position to determine that promotion
of the one view rather than the other is for the public benefit’.

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Purposes which may be charitable in certain circumstances
Political purposes
294. Organisations with a political purpose which is more than
incidental and ancillary to a charitable purpose have been held by the
Courts to not satisfy the technical legal meaning of ‘charity’. This is
referred to as the ‘political purposes doctrine’. The rationale is that a
Court is unable to determine whether such a purpose satisfies the
public benefit requirement of a charity.
295. In McGovern & Ors v. Attorney –General and Anor [1981] 3 All
ER 493, which considered whether Amnesty International was a
charity, Slade J defined political purposes broadly to include:
• furthering the interests of a particular political party;
• procuring changes in the laws of the country or a
foreign country;
• procuring a reversal of government policy in the
country or a foreign country; and
• procuring a change in particular decisions of
government authorities in the country or a foreign
country.
296. In finding that Amnesty International was not a charitable
organisation, Slade J emphasised the inability of the court as a matter
of evidence to judge whether a proposed change to the law is for the
public benefit and the court should not usurp the functions of the
legislature.
297. Until the High Court’s decision in Aid/Watch it was generally
accepted that ‘the political purposes doctrine’ applied in Australia. In
Aid/Watch the High Court considered whether an organisation whose
purpose was to ensure that foreign aid was delivered in a particular
way, and which aimed to influence government to this end, could be
charitable. The organisation was concerned with promoting the
effectiveness of Australian and multinational aid provided in foreign
countries by means of improved in vestment programs, projects and
policies. It researched ‘generally in partnership with people that are
recipients of aid and non-government organisations; it brought the
issues it identified to light by publicly releasing the research reports
and it campaigned for changes to the ways in which aid was delivered
through media releases and public events designed to influence
relevant agencies to alter the way aid programs are administered’.

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298. The Full Court of the Federal Court had concluded that the
organisation’s concern with the effectiveness of aid delivery was
clearly aimed at the relief of poverty, but that its attempts to persuade
the government to its point of view and to bring about a change in
government activity and policy was political activity, behind which was
a political purpose. As a result, it held the organisation could not be
charitable.
259
299. On appeal, the High Court reversed this decision. The majority
decided that ‘in Australia there is no general doctrine which excludes
from charitable purposes ‘political objects’ and has the scope
indicated in England by McGovern v. Attorney–General’ .
260
300. The rejection of the ‘political purposes doctrine’ by the majority
was based on the inconsistency between the doctrine and the system
of law in Australia provided for by the Constitution. The provisions of
the Constitution mandate a responsible and representative system of
government. The majority of the High Court stated that:
Communication between electors and legislators and the officers of
the executive and between electo rs themselves on matters of
government and politics is ‘an i ndispensable incident’ of that
constitutional system.
261
301. They stated at paragraph 45:
The system of law which applies in Australia …postulates for its
operation the very ‘agitation’ for l egislative and political changes of
which Dixon J spoke in Royal North Shore Hospital . …it is the
operation of these constitutional pr ocesses which contributes to the
public welfare. A court administering a charitable trust for that
purpose is not called upon to adjudicate the merits of any particular
course of legislative or executive action or inaction which is the
subject of advocacy or disputation within those processes.
302. The majority accepted the submissions of Aid/Watch
Incorporated that the generation by it of public debate as to the best
methods for the relief of poverty by the provision of foreign aid had
two characteristics indicative of its charitable status.
303. The first characteristic was that its activities were apt to
contribute to the public welfare, being for a purpose beneficial to the
community within the fourth head identified in Pemsel.
304. The second characteristic was that ‘…whatever else be the
scope today in Australia for the exclusion of ‘political objects’ as
charitable, the purposes and activities of Aid/Watch do not fall within
any area of disqualification for reasons of contrariety between the
established system of government and the general public welfare’.
262

259 Federal Commissioner of Taxation v. Aid/Watch Inc (2009) 178 FCR 4423. 260 Aid/Watch 2010 ATC 20-227; 77 ATR 195; [2010] HCA 42 at paragraph 48. 261 Aid/Watch 2010 ATC 20-227; 77 ATR 195; [2010] HCA 42 at paragraph 44. 262 Aid/Watch 2010 ATC 20-227; 77 ATR 195; [2010] HCA 42 at paragraph 46.

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305. The majority concluded that ‘the generation by lawful means
of public debate, in the sense described earlier in these reasons,
concerning the efficiency of foreign aid directed to the relief of
poverty, itself is a purpose beneficial to the community under the
fourth head of charity’.
263 For this reason they found it unnecessary to
rule on the submissions of the Commissioner that the Full Court
should have found that the main or predominant objects of Aid/Watch
Incorporated were too remote from the relief of poverty or
advancement of education under the first or second heads of Pemsel.
306. The majority did not consider it necessary to decide whether
the encouragement of public debate about any government activity
could be charitable under the fourth head in Pemsel. They said at
paragraph 48:
It also is unnecessary for this appeal to determine whether the fourth
head encompasses the encouragement of public debate respecting
activities of government which lie beyond the first three heads (or the
balance of the fourth head) identified in Pemsel…
307. Whether generating public debate about a particular
government activity or policy that lies beyond existing heads of charity
can be a charitable purpose under the fourth head will be decided on
a case by case basis. Arguably, all government activity or policy is
intended to be ‘beneficial to the community’ but this does not mean
generating public debate about any government activity or policy will
be charitable. The subject matter of the debate will still need to either
come within the spirit and intendment of the Preamble to the Statute
of Elizabeth (established by analogy to existing charitable purposes if
not directly specified) or be deemed charitable by legislation applying
for that purpose (see paragraph 10 of this Ruling). However, it is
expected that the subject matter of many areas of government activity
or policy would fall under one of the first three heads of charity or the
already established charitable purposes under the fourth head, and
where they do, a purpose of generating public debate about that
activity or policy will be charitable. Examples of purposes that have
been held to be charitable under one of the four heads of charity are
in Appendix 2 from paragraph 315 of this Ruling.
308. More generally, the majority also confirmed that there could
be instances where, as Dixon J said in The Royal North Shore
Hospital of Sydney v. Attorney- General (NSW) ,
264 purposes that
might otherwise seem to come within one of the four heads in Pemsel
do not contribute to the public welfare, but said that this would be:
by reason of the particular ends and means involved, not
disqualification of the purpose by application of a broadly expressed
‘political objects’ doctrine.
265
263 Aid/Watch 2010 ATC 20-227; 77 ATR 195; [2010] HCA 42 at paragraph 47. 264 (1938) 60 CLR 396. 265 Aid/Watch 2010 ATC 20-227; 77 ATR 195; [2010] HCA 42 at paragraph 49.

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309. The use of illegal means such as bribery to achieve an end,
and ends that are against public policy (for example the promotion of
anarchy) are examples of ‘ends and means’ that would disqualify a
purpose on the basis that it does not contribute to the public welfare.
310. Following the decision in Aid/Watch, an entity with a purpose
of generating public debate regarding government policy, activities or
legislation directed towards subject matters that come within one of
the four heads of charity can be charitable.
266 This is on the basis that
public debate on these matters is itself beneficial to the community
under the fourth head and therefore a charitable purpose.
311. An entity that promotes a particular point of view may still be
considered to be ‘generating public debate’ in the sense referred to
by the High Court. However, whether an organisation with a purpose
of lobbying (that is, directly approaching parliamentarians or
government officials) on a subject matter that is charitable will be
considered to be ‘generating public debate’ can only be determined
on a case by case basis.

Party political
312. The decision in Aid/Watch has not changed the view that
political parties and activities directly associated with political parties
such as electioneering are not charitable. As Dixon J said in The
Royal North Shore Hospital of Sydney v. Attorney- General (NSW) :
267
… where funds are devoted to the use of an association of persons
who have combined as a political party or otherwise for the purpose
of influencing or taking part in t he government of the country, it is
evident that neither the good int entions nor the public purposes of
such a body can suffice to support the trust as charitable.

Political activities which are merely incidental
313. If the purpose of an organisation is otherwise charitable, its
status will not be affected by non-charitable political activities that are
no more than incidental to the charitable end.
268
314. For example an institution with a sole
269 charitable purpose
could seek to persuade members of the public to vote for or against
particular candidates or parties in an election for public office, or
distribute material designed to underpin a party political campaign,
provided the activity was no more than incidental to its sole
270
charitable purpose.

266 This assumes that any other purposes t he entity has are either charitable or no
more than incidental or ancillary to a charitable purpose.
267 60 CLR 396 at 426. 268 See for example Victorian Women Lawyers’ Association v. Federal Commissioner
of Taxation (2008) 170 FCR 318; 2008 ATC 20-035; (2008) 70 ATR 138
269 See paragraph 5 of this Ruling. 270 See paragraph 5 of this Ruling.

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Appendix 2 – Court decisions on the
‘four heads of charity’.
This Appendix provides a summary of various court decisions
on the technical legal meaning of charitable.
Summary of court decisions
315. Court decisions on the technical legal meaning of charitable
are important in deciding whether a particular purpose is charitable.
The decisions can be used to draw analogies. The following
discussion is not intended as a substitute for the decisions
themselves. Using general principles drawn from the cases instead of
the decisions themselves can, in some situations, tend to confuse as
their consistency across various decisions is not always apparent.
271
Nonetheless, the discussion below provides an indication as to the
range of purposes that have been accepted as charitable, and the
sort of issues that can arise for different types of charity.

Relief of poverty
316. The relieving of poverty is a charitable purpose. The persons
to benefit need not be destitute or on the border of destitution.
272 In
Australia, those lacking the resources to obtain what is necessary for
a modest standard of living in the Australian community may be
accepted as suffering poverty.
273 To relieve poverty implies that the
people in question have a need attributable to their condition which
requires alleviating, and which those people could not alleviate or
would have difficulty in alleviating by themselves.
274 The ways in
which poverty can be relieved include providing money,
accommodation,
275 legal or medical aid. The charging of fees need
not be inconsistent with a purpose of relieving poverty. 276

271 As Lord Sterndale MR said in In re Tetley; National Provincial and Union Bank of
England Ltd v. Tetley [1928] 1 Ch 258 at 266: ‘As I have said, I, at any rate, am
unable to find any principle which will guide one easily, and safely, through the
tangle of the cases as to what is and what is not a charitable gift. If it is possible I
hope sincerely that at some time or other a principle will be laid down.’
272 Re Gillespie (deceased) [1965] VR 402 at 406. 273 Ballarat Trustees Executors and Agency Company Limited v. Federal
Commissioner of Taxation (1950) 80 CLR 350.
274 Joseph Rowntree Memorial Trust Housing Association Ltd and Ors v.
Attorney-General [1983] 1 All ER 288 at 295.
275 Re Niyazi’s Will Trusts [1978] 1 WLR 910; [1978] 3 All ER 785. 276 Re Cottam’s Will Trusts; Midland Bank Ex ecutor and Trustee Co. Ltd and Anor v.
Huddersfield Corporation and Ors [1955] 1 WLR 1299; [1955] 3 All ER 704.

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317. Purposes of relieving poverty have been accepted as
charitable where those to benefit were poor relatives, 277 poor
members of an association 278 and poor employees of an employer. 279
This is because, unlike other charitable purposes, the benefit does
not need to be for the community or a section of the community:
Dingle v. Turner and Ors [1972] 1 All ER 878; [1972] AC 601.
280

Relief of the needs arising from old age
318. A purpose of relieving the needs arising from old age is a
charitable purpose unless there is a limitation which deprives it of that
character.
281 The relief can take many forms such as the provision of
accommodation or nursing facilities, but it may also involve providing
relief in the form of companionship, mutual activities and the security
of community living to counter the effects of the isolation and
loneliness of old age.
282 This purpose must also be for the public
benefit. In Re Mills (deceased) (1981) 27 SASR 200 the testator left
part of his estate for the construction of an eventide settlement for the
descendants of his great grandparents. The bequest was held not to
be charitable because the public did not benefit, only those who had a
blood relationship with a particular person benefited.

Relief of sickness and distress
319. A purpose of relieving sickness is a charitable purpose.
Sickness usually connotes a disorder of health, an illness or an
ailment, whether mental or phy sical and whether permanent or
transient.

277 In re Scarisbrick’s Will Trusts; Cockshott v. Public Trustee and Ors [1951] 1 All ER
822. Compare the decision of In Re Niven (deceased) (unreported Kennedy J,
Supreme Court of Western Australia, 1936 of 1985) where a trust for any member
of the family in need of assistance and su pport was held not to be for the relief of
poverty.
278 Re Young’s Will Trusts; Westminster Bank Ltd v. Sterling and Ors [1955] 1 WLR
1269; [1955] 3 All ER 689.
279 Dingle v. Turner and Ors [1972] 1 All ER 878; [1972] AC 601. 280 As applied in Australia by Re Hilditch, deceased (1986) 39 SASR 469. 281 Hilder v. Church of England Deaco ness’ Institution Sydney Ltd and Ors [1973] 1
NSWLR 506 at 511.
282 D V Bryant Trust Board v. Hamilton City Council [1997] 3 NZLR 342.

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320. The following have been held to be a section of the public who
are in need of relief from sickness and distress: visually impaired
people,
283 hearing or speech impaired people, 284 people suffering
mental affliction, 285 people who are sick, 286 underprivileged people 287
and orphaned children. 288 The types of institutions that are charitable
because they provide relief to the sick public include hospitals, 289
convalescent homes 290 and sanatoria. 291
321. It is necessary that any purpose of relieving sickness or
distress must be for the benefit of the public. In Waterson and Ors v.
Hendon Borough Council [1959] 2 All ER 760 a friendly society
operated a hospital and other clinics for the benefit of its members. It
was held by Salmon J not to be charitable because its purposes were
not altruistic; ‘the object of the members of the society is not to do
good to others but to themselves.’
292

283 Re Inman (deceased) [1965] VR 238. 284 The President, Councillors and Ratepayers of the Shire of Nunawading v. The
Adult Deaf and Dumb Society of Victoria (1921) 29 CLR 98.
285 The Diocesan Trustees of Church of England in Western Australia v. The
Solicitor-General; The Home of Peace for the Dying and Incurable v. The
Solicitor-General (1909) 9 CLR 757.
286 Taylor and Anor v. Taylor and Ors (1910) 10 CLR 218. 287 Salvation Army (Victoria) Property Trust v. Fern Tree Gully Corporation (1952) 85
CLR 159.
288 The Attorney General for New South Wa les v. The Perpetual Trustee Company
Limited and Ors (1940) 63 CLR 209.
289 Le Cras v. Perpetual Trustee Co Ltd and Ors; Far West Children’s Health Scheme
and Ors v. Perpetual Trustee Co. Ltd and Ors [1967] 3 All ER 915.
290 Inland Revenue Commissioners v. Trustees of Roberts Marine Mansions (1927)
43 TLR 270.
291 Kytherian Association of Que ensland and Anor v. Sklavos (1958) 101 CLR 56. 292 Waterson and Ors v. Hendon Borough Council [1959] 2 All ER 760 at 764.

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Advancement of education
322. An institution or fund whose purpose is the advancement of
education for the public benefit is charitable. The conducting of
schools, colleges and universities for general learning are well-known
ways of advancing education. Schooling is not limited to the general
education of the young and need not be academic. More specialised
schooling has been treated as valid for the advancement of
education. Examples include a farming training school,
293 training in
aviation, 294 technical education, 295 training in the construction
industry, 296 commercial education, 297 economic and sanitary
science, 298 the arts of social intercourse, 299 the study of law, 300 a
school of archaeology, 301 study of natural history, 302 scientific study of
obstetrics and gynaecology 303 and a kindergarten. 304
323. The support of the educational activities of charitable schools
and colleges has also been accepted as charitable. Examples include
providing scholarships
305 and professorships. 306

293 Re Tyrie (deceased) [1970] VR 264. 294 In re Lambert (deceased) [1967] SASR 19. 295 The Royal North Shore Hospital of Sydney v. Attorney-General for New South
Wales and Ors (1938) 60 CLR 396.
296 Barclay & ors v. Treasurer of Queensland 95 ATC 4496; (1995) 31 ATR 123. 297 Re Koettgen (deceased); Westminster B ank Ltd and Anor v. Family Welfare
Association Trustees, Ltd and Ors [1954] 1 All ER 581.
298 Re Berridge; Berridge v. Tune (1890) 90 LT 55. 299 Re Shaw’s Will Trusts; National Provincial Bank Ltd v. National City Bank Ltd and
Ors [1952] 1 All ER 49.
300 College of Law (Properties) Pty Ltd v. Willoughby Municipal Council (1978) 38
LGRA 81; Smith v. Kerr [1902] 1 Ch 774.
301 Re British School of Egyptian Archaeol ogy; Murray and Ors v. Public Trustee and
Ors [1954] 1 All ER 887.
302 In re Benham [1939] SASR 450. 303 McGregor v. Commissioner of Stamp Duties [1942] NZLR 164. 304 Hixon v. Campbell and Ors (1924) 24 SR (NSW) 436 and Kindergarten Union of
NSW Incorporated v. Waverley Municipal Council (1960) 5 LGRA 365.
305 Re Weaver; Trumble v. Animal Welfare League of Victoria [1963] VR 257; Wilson
v. Toronto General Trus ts Corporation et al [1954] 3 DLR 136.
306 Dorothea Yates v. University College, London and C.T.D’Eyncourt (1874-5) 7 AC
438.

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324. Objects and activities that, when viewed separately might not
be educational, may be charitable where they are incidental to or
integrated with a school or college’s educational purposes and
activities. Examples are a school or university’s sporting programs
307
and facilities, 308 school excursions, 309 the students union set up by a
medical college, 310 the setting up of a rose garden in a university, 311 a
student loan fund 312 and a fund to help students on the death of a
parent. 313
325. However, it is not sufficient that those objects or activities are
related in some way to the activities of the school or college; they
must be integrated with the educational purposes. For example, in
Rex v. The Special Commissioners of Income Tax; (ex parte The
Headmasters’ Conference); Rex v. The Special Commissioners of
Income Tax (ex parte the Incorporated Association of Preparatory
Schools) (1925) 10 TC 73 a professional association for headmasters
was not accepted as being established for educational purposes only.
326. Enjoyment for the students is not inconsistent with a charitable
purpose of education. Organisations for the young that have been
accepted as educational include the boy scouts,
314 a police citizens
boys club, 315 and a sea cadets branch. 316 While the education they
provided was not for education’s sake, instruction and training were
central to their purposes and activities. The modes of such training
were consistent with their particular educational purposes of forming
the young according to modern ideas of education aimed at the
development of both the mind and body.
317

307 Inland Revenue Commissioners v. McMullen and Ors [1980] 1 All ER 884;
Kearins v. Kearins (1957) SR (NSW) 286.
308 Re Mariette; Marie tte v. Aldenham Sc hool Governing Body [1914-15] All ER Rep
794.
309 Re Mellody; Brandwood v. Haden [1916-17] All ER Rep 324. 310 London Hospital Medical College v. Inland Revenue Commissioners and Anor
[1976] 2 All ER 113. See also Attorney-General v. Ross and Ors [1985] 3 All ER
334.
311 McGrath and Anor v. Cohen and Ors [1978] 1 NSWLR 621. 312 Guaranty Trust Company of Canada v. The Minister of National Revenue [1967] SCR 133.
313 Educational Fees Protection Society Inc v. Commissioner of Inland Revenue
[1992] 2 NZLR 115.
314 The Boy Scouts Association, NSW Branch v. Sydney City Council (1959) 4 LGRA
260; Re Webber (deceased); Barclays Bank Ltd v. Webber and Ors [1954] 3 All
ER 712.
315 Greater Wollongong City Council v. Feder ation of New South Wales Police
Citizens Boys’ Club (1957) 2 LGRA 54.
316 Lloyd and Anor v. Federal Commissioner of Taxation (1955) 93 CLR 645. 317 Minahan and Anor v. Commissioner of Stamp Duties (NSW) (1926) 26 SR (NSW)
480.

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327. Education can also extend to the improvement of a useful
branch of knowledge and its dissemination. Purposes that fall into this
category may also be charitable as other purposes beneficial to the
community. For example a geographical society,
318 a college of
surgeons, 319 a zoological society, 320 an institute of civil engineers, 321
museums, 322 art galleries, 323 a national trust for places of historic
interest and national beauty324 and a conference promoting
international cooperation. 325
328. An educative purpose has been contrasted with purely
studious occupation, the former being charitable, the latter not.
326
Also, the charitable advancement of education does not encompass
education in the sense that all experience is educative.
327
329. A purpose is not charitable for the advancement of education
if it tends merely to increase the store of knowledge in society in ways
that are not integrated with education. For example, in Re Shaw
(deceased); Public Trustee v. Day and Ors [1957] 1 All ER 745 the
playwright GB Shaw had left funds to investigate a proposed 40 letter
alphabet including its economic consequences, and to publish works
using it so as to advance its adoption. In holding that there was no
charity Harman J said at 753:
The research and propaganda enjoined by the testator seem to me
merely to tend to the increase of public knowledge in a certain
respect, namely, the saving of time and money by the use of the
proposed alphabet. There is no element of teaching or education
combined with this, nor does the propaganda element in the trusts
tend to more than to persuade the pu blic that the adoption of the
new script would be ‘a good thing’, and that, in my view, is not
education.
330. The advancement of education does not include indoctrination
with the merits of a cause. 328

318 Beaumont v. Oliveira (1868-9) 4 LR Ch App 309. 319 Royal College of Surgeons of England v. National Provincial Bank Ltd and Ors
[1952] 1 All ER 984.
320 Re Lopes; Bence Jones v. Zoological Society of London [1930] All ER Rep 45. 321 Institution of Civil Engineers v. Commissioners of Inland Revenue [1932] 1 KB
149.
322 Re Allsop (deceased); Gell v. Carver (1884) 1 TLR 4. 323 J.C. Abbott, J. Cowan and F. Torrance v. J. Fraser and Ors (1874) LR 6 PC 96. 324 Re Verrall; National Trust for Places of Historic Interest or National Beauty v.
Attorney-General [1914-15] All ER Rep 546.
325 Re Koeppler’s Will Trusts; Barclays Bank Trust Co plc v. Slack and Ors [1985] 2
All ER 869.
326 Whicker v. Hume [1843-60] All ER Rep 450. 327 Inland Revenue Commissioners v. Baddeley and Ors [1955] 1 All ER 525 at 529. 328 Molloy v. Inland Revenue Commissioner (NZ) (1977) 8 ATR 323.

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Advancement of religion
331. The advancement of religion is a charitable purpose.
329 In this
context religion involves belief in a supernatural being, thing or
principle and acceptance of canons of conduct which give effect to
that belief.
330 Religion covers major religions such as Christianity,
Islam, Judaism, Buddhism and Taoism, and also Jehovah
Witnesses,
331 the Free Daist Communion of Australia, 332
Scientology, 333 and indigenous religions. The categories of religion
are not closed.334
332. To advance religion has been described in the following
terms:
The promotion of religion means the promotion of spiritual teaching
in a wide sense, and the maintenance of the doctrine on which it
rests, and the observances that serve to promote and manifest it.
335
To advance religion means to promote it, to spread its message ever
wider amongst mankind; to take some positive steps to sustain and
increase religious belief; and these things are done in a variety of
ways which may be comprehensively described as pastoral and
missionary.
336
329 The Roman Catholic Archbishop of Melbourne v. Lawlor and Ors; His Holiness the Pope v. National Trustees, Executor s and Agency Company of Australasia
and Ors (1934) 51 CLR 1 at 32-33.
330 The Church of the New Faith v. The Commissioner of Pay-roll Tax (Victoria)
(1983) 154 CLR 120.
331 Appeal of Frank Gundy (1944) 61 WN (NSW) 102. 332 The Free Daist Communion of Australia Limited v. Comptroller of Stamps (Vic) 88
ATC 2001.
333 The Church of the New Faith v. The Commissioner of Pay-roll Tax (Victoria)
(1983) 154 CLR 120.
334 Murphy J in The Church of the New Faith v. The Commissioner of Pay-roll Tax
(Victoria) (1983) 154 CLR 120 at 151.
335 Keren Kayemeth Le Jisroel Limited v. Commissioners of Inland Revenue [1931] 2
KB 465 at 477.
336 Lush J in Association of Franciscan Order of Friars Minor v. City of Kew [1967] VR
732 at 733 quoting United Grand Lodge of Free and Accepted Masons of England
v. Holborn Borough Council [1957] 3 All ER 281 at 285.

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333. The purpose must be directly and immediately religious. 337 It
may involve various ways of advancing religion:
The purpose may be executed by gifts for the support, aid or relief of
clergy and ministers or teachers of religion, the performance of
whose duties will tend to the sp iritual advantage of others by
instruction and edification; by gifts for ecclesiastical buildings,
furnishings, ornaments and the like; by gifts to provide for religious
services, for sermons, for music, choristers and organists, and so
forth; by gifts to religious bodies, or ders or societies, if they have in
view the welfare of others.
338
334. Examples from the cases where a charitable purpose of
advancing religion has been found include:
• providing and maintaining facilities for worship:
building a church,
339 a gallery, organ seating and a bell
in a church, 340 a window in a cathedral, 341 the erection
of a tomb in a churchyard, 342 monuments in a
church, 343 a church choir 344 and seating
accommodation; 345
• supporting religious clergy: maintaining sick and
infirm priests,
346 assisting candidates for holy orders 347
and a fund to provide retirement annuities for pastors,
evangelists and missionaries;
348
• missionary bodies: the missionary establishment of
a Christian body among heathen nations
349 and a
church missionary society; 350 and

337 The Roman Catholic Archbishop of Mel bourne v. Lawlor and Ors; His Holiness
the Pope v. National Trustees, Executor s and Agency Company of Australasia
and Ors (1934) 51 CLR 1 at 32-33 per Dixon J.
338 The Roman Catholic Archbishop of Mel bourne v. Lawlor and Ors; His Holiness
the Pope v. National Trustees, Executor s and Agency Company of Australasia
and Ors (1934) 51 CLR 1 at 32 per Dixon J. The examples provided are not an
exhaustive list. Other ways religious charities might advance religion include
publishing and selling their religious books and periodicals, providing aids to
pastors to help carry out their pastoral missions, and operating conference centres
to facilitate training, retreats and seminars for their religious projects.
339 Re Maclachlan; Maclachlan v. Campbell and Ors (1900) 26 VLR 548. 340 Re Mitchner (deceased); Union Trustee Company of Australia and Anor v.
Attorney-General for the Commonwealth of Australia and Ors [1922] St R Qd 39.
341 Muir v. Archdall (1918) 19 SR (NSW) 10. 342 Re Pardoe; McLaughlin v. Attorney-General [1906] 2 Ch 184. 343 In re Sussanah D. Barker (deceased); Sherrington v. Dean and Chapter of St
Paul’s Cathedral and Ors (1909) 25 TLR 753.
344 Re Royce; Turner v. Wormald and Ors [1940] 2 All ER 291. 345 Re Raine (deceased); Walton v. Attorney-General and Anor [1956] 1 All ER 355. 346 In re Forster; Gellatly v. Palmer [1939] 1 Ch 22. 347 In re Williams; Public Trustee v. Williams [1927] 2 Ch 283. 348 Baptist Union of Ireland (Northern) Corpor ation Limited v. The Commissioners of
Inland Revenue [1945] NILR 99.
349 The Commissioners for Special Purposes of the Income Tax v. Pemsel [1891] AC
531; [1891-4] All ER Rep 28.
350 In the matter of the Clergy Society (1856) 2 K & J 615.

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• religious associations: the YMCA, 351 a religious
retreat house open to the public, 352 a Sunday school
association, 353 a Protestant alliance, 354 a religious
community house 355 and a religious faith-healing
movement. 356
335. It is not enough that a purpose arises out of or has a
connection with a faith, a church or a denomination. If the purpose is
not directly and immediately religious it is not charitable. Social and
sporting entities are not charitable even if membership is limited to
believers in a particular religion (see paragraphs 262 to 268 of this
Ruling). Examples from the cases where a purpose involving religion
was found to not be charitable include: •
a gift for a private chapel in a house;
357
• a gift of the residue of an estate for a member of the
clergy to use in ways that are not necessarily
charitable;
358
• founding a Catholic daily newspaper;
359 and
•
a company purchasing land and property for a Jewish
homeland.
360

351 City of South Melbourne v. Young Me n’s Christian Association of Melbourne
[1960] VR 709; The Young Men’s Christian Association of Melbourne v. Federal
Commissioner of Taxation (1926) 37 CLR 351.
352 Association of Franciscan Order of Friars Minor v. City of Kew [1967] VR 732. 353 The King v. Special Commissioners of Income Tax; ex parte Essex Hall [1911] 2
KB 434.
354 In re Delmar Charitable Trust [1897] 2 Ch 163. 355 Re Banfield (deceased); Lloyd’s Bank Ltd v. Smith and Ors [1968] 2 All ER 276. 356 Re Le Cren Clarke (deceased); Funnell and Anor v. Stewart and Ors [1996] 1 All
ER 715.
357 Hoare v. Hoare [1886-90] All ER Rep 553. 358 Dunne v. Byrne [1911-13] All ER Rep 1105. 359 The Roman Catholic Archbishop of Mel bourne v. Lawlor and Ors; His Holiness
the Pope v. National Trustees, Executor s and Agency Company of Australasia
and Ors (1934) 51 CLR 1. This was not to say, of course, that no newspaper could
be religious and charitable. Rather, in t he case there was no evidence that the
proposed newspaper was to advance religion.
360 Keren Kayemeth Le Jisroel Limited v. Commissioners of Inland Revenue [1932] AC 650.

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336. A purpose involving religion is not charitable if the public
benefit is absent. 361 For example, a scriptural college was not
charitable where it was for the descendants of particular persons. 362
For communities that are established for religious purposes, it is
necessary they bring some spiritual benefit to the community by a
propagation or promotion of religion.
363 If spiritual benefits are
restricted to family members or friends the necessary public benefit
does not arise as there is not an advancement of religion beyond this
closed group:
364
There is, in truth, no ‘charity’ in attempting to improve one’s own
mind or save one’s own soul. Charit y is necessarily altruistic and
involves the idea of aid or benefit to others …
365

Other charitable purposes under the ‘fourth head’ of charity
337. To qualify as a charitable institution under the fourth head, an
institution must have a purpose that is both beneficial to the
community and within the spirit and intendment of the Preamble to
the Statute of Elizabeth.
366 The following are cases where the Courts
have accepted that the purposes are charitable under the fourth head
of charity. The cases have been grouped into broad categories only
to provide guidance on the range of purposes that have been
considered under the fourth head. Each case must depend on its own
facts, and the list is not exhaustive.
• public works and utilities: a library,
367 a museum, 368
a public hall, 369 a showground, 370 a botanical
garden, 371 a cremation service, 372 a concert ha 373
a recreation area for the public; ll
and

374
361 Legislation deems some religious orders to be for the public benefit; see paragraph 151 of this Ruling.
362 Beatrice Alexandra Victoria Davies v. Perpetual Trustee Co. (Ltd) and Ors (1959)
59 SR (NSW) 112.
363 Gilmour v. Coats and Ors [1949] 1 All ER 848; [1949] AC 426. 364 Yeap Cheah Neo and Ors v. Ong Cheng Neo (1875) LR 6 PC 381; Ip
Cheung-Kwok v. Sin Hua Bank Trustee Ltd and Ors [1990] 2 HKLR 499.
365 In re Delaney; Conoley v. Quick [1902] 2 Ch 642 at 648-64 9; cf the arrangement
in Rowston v. Commissioner of Land Tax (1984) 15 ATR 366.
366 See in particular paragraph 111 of this Ruling. 367 J.C Abbott, J. Cowan and F. Torrance v. J. Fraser and Ors (1874) LR 6 PC 96. 368 Re Gwilym, deceased [1952] VLR 282. 369 Monds v. Stackhouse and Ors (1948) 77 CLR 232. 370 Brisbane City Council and Anor v. Attorney-General of Queensland [1978] 3 All
ER 30.
371 Townley v. Bedwell (1801) 6 Ves 195. 372 Scottish Burial Reform and Cremation So ciety, Ltd v. Glasgow City Corporation
[1967] 3 All ER 215.
373 In re The Henry Wood National Memorial Trust; Armstrong and Ors v.
Moiseiwitsch and Ors [1966] 1 WLR 1601.
374 Burnside City Council v. Attorney-General of South Australia (1992) 75 LGRA
145.

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• anti-discrimination: working to remove barriers
arising from gender based discrimination against
women’s’ participation and advancement in the legal
profession;
375
• disaster relief: relief for flood victims,
376 relief of
distress caused by war 377 and a lifeboat institution; 378
•
culture: drama and acting,
379 music, 380 choral
singing, 381 portrait painting, 382 organ music 383 and an
orchestra endowment fund; 384
• scientific and scholarly research: the advancement
of scientific research generally,
385 the improving of
natural knowledge and improvement and diffusing of
geographical knowledge,
386 research in Egyptology
and archaeology, 387 research into finding the
‘Bacon-Shakespeare’ manuscripts, 388 and research
into the theory of education; 389

375 Victorian Women Lawyers’ Association v. Federal Commissioner of Taxation
(2008) 170 FCR 318; [2008] FCA 983.
376 Re North Devon and West Somerset Relief Fund Trusts; Hylton (Baron) and Anor v. Wright and Anor [1953] 2 All ER 1032.
377 Re Pieper (deceased); The Trustees Executors & Agency Co. Ltd v.
Attorney-General (Vic.) [1951] VLR 42.
378 Re Clarke (deceased); Bracey v. Royal National Lifeboat Institution [1923] All ER
Rep 607.
379 Re Shakespeare Memorial Trust; Earl of Lytton v. Attorney-General [1923] All ER
Rep 106.
380 Commissioners of Inland Revenue v. The Glasgow Musical Festival Association
[1926] SC 920.
381 Royal Choral Society v. Commissioners of Inland Revenue [1943] 2 All ER 101. 382 Perpetual Trustee Co. Ltd v. Groth and Ors [1985] 2 NSWLR 278. 383 Re Levien (deceased); Lloyds Bank Ltd v. Worshipful Company of Musicians and
Ors [1955] 3 All ER 35.
384 Re Municipal Orchestra Endowment Fund [1999] QSC 200. 385 Taylor and Anor v. Taylor and Ors (1910) 10 CLR 218. 386 Beaumont v. Oliveira (1868-9) 4 LR Ch App 309. 387 Re British School of Egyptian Archaeo logy; Murray and Ors v. Public Trustee and
Ors [1954] 1 All ER 887.
388 Re Hopkins’ Will Trusts; Naish and Anor v. Francis Bacon Society Incorporated
and Ors [1964] 3 All ER 46.
389 In the Estate of Schultz; Playford v. University of Adelaide and Ors [1961] SASR
377.

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• promoting industry, commerce and agriculture:
horticulture, 390 agriculture, 391 craftsmanship, 392
research into wheat, 393 prevention of disease in cattle
or sheep, 394 adoption of electronic commerce, 395 and
promotion of a culture of innovation and
entrepreneurship;
396
• defence and public order: promoting efficiency in the
armed forces
397 and police forces, 398 caring for
dependants of veterans, 399 promoting defence of the
country from hostile aircraft400 and a repatriation fund
for the benefit of returned soldiers; 401
• protecting animals: a home for lost dogs,
402 an
institution providing a home for starving cats,403 and
the Royal Society for the Prevention of Cruelty
Animals. to
Foundation;

404 The purpose must either help animals or
promote humane feelings in people by either caring for
or preventing cruelty towards animals;
405
• environment: preservation of native wild life both flora
and fauna,
406 the improvement and protection of a
river, 407 and the Australian Conservation 408
390 In re Pleasants; Pleasants v. Attorney-General (1923) 39 TLR 675. 391 Commissioners of Inland Revenue v. Yorkshire Agricultural Society [1928] 1 KB
611.
392 Commissioners of Inland Revenue v. White and Ors and Attorney-General (1980)
55 TC 651.
393 Freeman and Ors v. Attorney-General for New South Wales [1973] 1 NSWLR
729.
394 McGarvie Smith Institute v. Campbelltown Municipal Council (1965) 11 LGRA
321.
395 Tasmanian Electronic Commerce Centre Pty Ltd v. Commissioner of Taxation
(2005) 142 FCR 371; 2005 ATC 4219; (2005) 59 ATR 10.
396 Commissioner of Taxation v. The Triton Foundation (2005) 147 FCR 362; [2005] FCA 1319.
397 Re Good; Harrington v. Watts [1904-7] All ER Rep 476. 398 Chesterman v. Mitchell (1924) 24 SR (NSW) 108. 399 Downing v. Federal Commissioner of Taxation (1971) 125 CLR 185; 71 ATC
4164; (1971) 2 ATR 472.
400 In re Driffill (deceased); Harvey and Anor v. Chamberlain and Ors [1950] 1 Ch 92. 401 Verge v. Somerville and Ors [1924] AC 496. 402 Re Douglas; Obert and Ors v. Barrow [1886-90] All ER Rep 228. 403 Swifte v. Attorney-General [1912] 1 IR 133. 404 Re Inman (deceased) [1965] VR 238. 405 Murdoch v. Attorney-General (1992) 1 Tas SR 117. In Perpetual Trustees
Tasmania Ltd v. The State of Tasmania [2000] TASSC 68 Slicer J made obiter
comments that ‘The rationale that in order to be charitable the terms of a trust
must be of benefit to humankind can be accepted when the prevention of cruelty
to animals, the prevention of the destruction of species, imbalance within the
environment with the attendant harm to animals, are matters which enhance the
life of humans.’.
406 Attorney-General (NSW) v. Sawtell and Anor [1978] 2 NSWLR 200. 407 Kaikoura County v. Boyd [1949] NZLR 233. 408 Note that this is a decision of the Vi ctorian Civil and Administrative Tribunal in
Australian Conservation Foundation Inc v. Commissioner of State Revenue [2002] VCAT 1491.

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• indigenous persons: aiding disadvantaged
Aboriginals or Torres Strait Islanders, 409 developing
radio and television programs relevant to indigenous
people and training indigenous people as
communication workers;
410
• moral improvement: the study and dissemination of
ethical principles,
411 promotion of temperance, 412 and
an anthroposophical society; 413
• peace and human rights: working to promote,
protect and fulfil human rights and research into human
rights violations,
414 and working for the elimination of
war; 415
• a locality or neighbourhood: for the benefit of a city,
town or district, for example, the beautification and
advancement of a township.
416 However, a
non-charitable purpose does not become charitable by
limiting it to a locality. For example, a social club for the
inhabitants of a particular town would not be
charitable.
417

409 Aboriginal Hostels Ltd v. Darwin City Council (1985) 75 FLR 197; Flynn and Ors v.
Mamarika and Ors (1996) 130 FLR 218.
410 Native Communications Society of BC v. Minister of National Revenue [1986] 3
FC 471.
411 Barralet and Ors v. Attorney-General and Ors [1980] 3 All ER 918. 412 Re Hood; Public Trustee v. Hood [1930] All ER Rep 215. 413 Re Price; Midland Bank, Executor and Trustee Co Ltd v. Harwood and Ors [1943] 2 All ER 505.
414 Obiter comments in Webb v. O’Doherty [1991] TLR 68. 415 Re Blyth [1997] 2 Qd R 567 at 579-581. 416 Schellenberger v. The Trustees Exec utors and Agency Company Limited and
Anor (1952) 86 CLR 454.
417 Trustees of Sir Howell Jones Williams’ Trusts v. Inland Revenue Commissioners
[1947] 1 All ER 513.

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Appendix 3 – Detailed contents list
338. The following is a detailed contents list for this Ruling:
Paragraph
What this Ruling is about 1
Definitions 5
Previous Rulings 6
Ruling 7
Technical legal meaning of charitable 10
Charitable purposes – spirit and intendment of the
Statute of Elizabeth 11
Deemed charitable purposes 13
Public benefit 15
Deemed public benefit 20
Charitable institution or fund 23
Charitable institution 24
Charitable purpose 26
‘Main or predominant or dominant’ purpose 27
‘Incidental or ancillary’ purpose 28
Independent purpose 29
Finding purpose 30
Profit making 38
Power to accumulate 39
Charitable fund 41
Purposes which are not charitable 46
The purpose is to confer private benefits 47
Distributions to owners or members 47
Benefits for members 49
Benefits for individual entities that may not be members
of an organisation 53
Incidental or ancillary private benefits 55
The purpose is social, recreational or sporting 56
The purpose is illegal 59
The purpose is commercial 60
The purpose is governmental 64

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The purpose is vague, has insufficient value or
is of indeterminable value for the community 68
Purposes which may be charitable in certain circumstances 70
Political purposes 70
Examples 74
Example 1 – Institution 75
Example 2 – Purposes beneficial to the community 77
Example 3 – Incidental or ancillary to a charitable purpose 78
Example 4 – Independent non-charitable purposes –
not incidental or ancillary to a charitable purpose 80
Example 5 – Commercial activities in furtherance of a
charitable purpose 83
Example 6 – Commercial activities not in furtherance of a
charitable purpose 85
Example 7 – Accumulation of profits consistent with
charitable purpose 86
Example 8 – Accumulation of profits not consistent with
charitable purpose 88
Example 9 – Surplus from commercial activities with surplus
paid to member that is an endorsed charitable institution 89
Example 10 – Governmental purposes – not charitable purpose 91
Example 11 – Generating public debate – charitable purpose 94
Example 12 – Generating public debate – charitable purpose 95
Example 13 – Advocacy – not charitable purpose 98
Example 14 – Advocacy – not charitable purpose 100
Example 15 – Trust funding advocacy activities or
projects – charitable purpose 102
Date of effect 104
Appendix 1 – Explanation 105
Technical legal meaning of charitable 108
Charitable purposes – spirit and intendment of the
Statute of Elizabeth 112
Deemed charitable purposes 119
Child care services 122
National Rental Affordability Scheme dwelling 126
Public benefit 129
Value or benefit 130
Available to the public 136

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Deemed public benefit 150
Closed or contemplative religious orders 151
Self-help groups 155
Charitable institution or fund 163
Charitable institution 165
Charitable purpose 173
Main or predominant or dominant purpose 177
‘Incidental or ancillary’ purpose 180
Independent purpose 185
Finding purpose 186
Objects in constituent documents 187
Relevance of activities 196
Other factors 208
Purpose of a peak or similar body 212
Purpose may change over time 217
Profit making 219
Power to accumulate 220
Charitable fund 224
Purposes which are not charitable 231
The purpose is to confer private benefits 231
Distributions to owners or members 233
Benefits for members 245
Benefits for individual entities that may not be
members of an organisation 251
Incidental or ancillary private benefits 258
Member benefits provided by an open and
non-discriminatory self-help group 261
The purpose is social, recreational or sporting 262
The purpose is illegal 269
The purpose is commercial 271
The purpose is governmental 278
The purpose is vague, has insufficient value or is
of indeterminable value for the community 288
Purposes which may be charitable in certain circumstances 294
Political purposes 294
Party political 312

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Political activities which are
merely incidental 313
Appendix 2 – Court decisions on the
‘four heads of charity’ 315
Summary of court decisions 315
Relief of poverty 316
Relief of the needs arising from old age 318
Relief of sickness and distress 319
Advancement of education 322
Advancement of religion 331
Other charitable purposes under the ‘fourth head’ of charity 337
Appendix 3 – Detailed contents list 338

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References
Previous draft:
TR 2011/D2

Related Rulings/Determinations:
TR 2000/11; TR 2003/5;
TR 2005/22; TR 2006/10

Previous Rulings/Determinations:
TR 2005/21

Subject references:
– charitable organisations
– charitable trusts
– charities
– FBT charitable institutions and
the promotion and prevention
of disease in humans
– fringe benefits tax
– health promotion charities
– income tax
– income tax exempt charities
– public benevolent institutions

Legislative references:
– FBTAA 57A
– FBTAA 57A(5)
– FBTAA 65J
– FBTAA 123D(1)
– ITAA 1936 23(e)
– ITAA 1997 Div 30
– ITAA 1997 30-15 item 1
– ITAA 1997 30-20(1)
– ITAA 1997 30-20(1) item 1.1.6
– ITAA 1997 30-45(1) item 4.1.4
– ITAA 1997 30-45(1) item 4.1.5
– ITAA 1997 30-45(1) item 4.1.6
– ITAA 1997 30-45(1) item 4.1.7
– ITAA 1997 30-45(1A)
– ITAA 1997 30-46(1)
– ITAA 1997 Div 50
– ITAA 1997 Subdiv 50-B
– ITAA 1997 50-1
– ITAA 1997 50-5
– ITAA 1997 50-5 item 1.1
– ITAA 1997 50-5 item 1.5
– ITAA 1997 50-5 item 1.5A
– ITAA 1997 50-5 item 1.5B
– ITAA 1997 50-20 item 4.1
– ITAA 1997 50-50
– ITAA 1997 50-57
– ITAA 1997 50-60
– ITAA 1997 50-72 – ITAA 1997 50-105
– ITAA 1997 50-110
– ITAA 1997 207-115
– Charitable Trusts Act 1993
(NSW) 23(1)
– Charitable Trusts Act 1962 (WA) 5
– Charities Act 1978 (Vic) 7M
– Corporations Act 2001 254SA
– Extension of Charitable
Purpose Act 2004 4
– Extension of Charitable Purpose Act 2004 4A
– Extension of Charitable Purpose Act 2004 4A(2)
– Extension of Charitable
Purpose Act 2004 5
– Extension of Charitable Purposes Act 2004 5(2)
– Land Tax Management Act 1956 (NSW)
– Recreational Charities Act
1958 (Eng)
– Statute of Charitable Uses 1601 43 Eliz., c.4
– Trustee Act 1936 (SA) 69C
– Trustee Act 1936 (SA) 69A(1)
– Trustees Act 1962 (WA) 102(1)
– Trusts Act 1973 (Qld) 103
– Trusts Act 1973 (Qld) 104
– Variation of Trusts Act 1994 (Tas) 4
– Variation of Trusts Act 1994 (Tas) 4(3)

Case references:
– Aboriginal Hostels Ltd v. Darwin City Council (1985) 75
FLR 197
– Aid/Watch Incorporated v. FC of T [2010] HCA 42; 2010 ATC
20-227; (2010) 77 ATR 195
– Alberta Institute on Mental Retardation v. The Queen
[1987] 3 FC 286
– Ambulance Service of New South Wales v. Federal
Commissioner of Taxation
(2003) 130 FCR 477;
2003 ATC 4674; (2003) 53
ATR 391

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– Appeal of Frank Gundy (1944)
61 WN (NSW) 102
– Ashfield Municipal Council v. Joyce and Ors (1977) 51 ALJR
117; [1976] 1 NSWLR 455;
[1978] AC 122; [1976] 3 WLR
617
– Associated Provident Funds
Pty Ltd v. FC of T (1966) 14
ATD 333; 10 AITR 290
– Association of Franciscan
Order of Friars Minor v. City of
Kew [1967] VR 732; 30 :LGRA
384
– Attorney-General (NSW) v. Sawtell and Anor [1978] 2
NSWLR 200
– Attorney-General v. Cahill and Ors [1969] 1 NSWR 85
– Attorney-General v. National Provincial and Union Bank of
England and Ors [1924] AC
262; [1923] All ER Rep 123
– Attorney-General v. Ross and Ors [1985] 3 All ER 334
– Auckland Medical Aid Trust v. Commissioner of Inland
Revenue [1979] 1 NZLR 382
– Australian Conservation Foundation Inc v.
Commissioner of State
Revenue [2002] VCAT 1491
– Ballarat Trustees Executors
and Agency Company Limited
v. Federal Commissioner of
Taxation (1950) 80 CLR 350
– Baptist Union of Ireland (Northern) Corporation Ltd v.
Commissioners of Inland
Revenue (1945) 26 TC 335;
[1945] N Ir LR 99
– Barclay & ors v. Treasurer of
Queensland 95 ATC 4496;
(1995) 31 ATR 123
– Barralet and Ors v.
Attorney-General and Ors
[1980] 3 All ER 918
– Beatrice Alexandra Victoria
Davies v. Perpetual Trustee
Co. (Ltd) and Ors (1959) 59
SR (NSW) 112; [1959] AC 439
– Beaumont v. Oliveira (1868-9) 4 LR Ch App 309
– Bicycle Victoria Inc v Federal Commissioner of Taxation
[2011] AATA 444; (2011) 2011
ATC 10-188 – Braithwaite v.
Attorney-General [1909] 1 Ch
510
– Brisbane City Council and Anor v. Attorney-General of
Queensland [1978] 3 All ER 30
– Burnside City Council v. Attorney-General of South
Australia (1992) 75 LGRA 145
– Canterbury Development Corporation v. Charities
Commission [2010] 2 NZLR
707
– Case No 92 12 TBRD 749
– Central Bayside General Practice Association Ltd v.
Commissioner of State
Revenue (2006) 228 CLR 168;
[2006] HCA 43; 2006 ATC
4610 63 ATR 220
– Chesterman v. Federal Commissioner of Taxation
(1925) 37 CLR 317
– Chesterman v. Mitchell (1924) 24 SR (NSW) 108
– Chief Commissioner of State Revenue v. Northern NSW
Football Ltd (RD) [2010] NSWADTAP 28
– Christian Enterprises Ltd v. Commissioner of Land Tax
(1968) 88 WN (Pt. 2) (NSW)
112
– City of South Melbourne v. Young Men’s Christian
Association of Melbourne
[1960] VR 709
– College of Law (Properties) Pty Ltd v. Willoughby
Municipal Council (1978) 38
LGRA 81
– Commissioner for ACT
Revenue Collections v.
Council of the Dominican
Sisters of Australia (1991) 101
ALR 417; 91 ATC 4602; (1991)
22 ATR 213
– Commissioner of Land Tax for
the State of New South Wales
v. Joyce and Ors (1974) 132
CLR 22; (1974) 5 ATR 32
– Commissioner of Taxation v.
The Triton Foundation (2005)
147 FCR 362; [2005] FCA
1319; 2005 ATC 4891 60 ATR
451

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– Commissioners of Inland
Revenue v. Oldham Training
and Enterprise Council (1996)
69 TC 231
– Commissioners of Inland
Revenue v. The Glasgow
Musical Festival Association
[1926] SC 920
– Commissioners of Inland Revenue v. White and Ors and
Attorney-General (1980) 55 TC
651;[1980] TR 155
– Commissioners of Inland
Revenue v. Yorkshire
Agricultural Society [1928] 1
KB 611; [1927] All ER Rep 536
– Compton and Ors v. Federal Commissioner of Taxation
(1966) 116 CLR 233 [1966] HCA 1
– Congregational Union of New South Wales v. Thistlethwayte
(1952) 87 CLR 375
– Cremation Society of Australia Ltd v. Commissioner of Land
Tax (NSW) [1973] 2 NSWLR
704; 4 ATR 194
– Cronulla Sutherland Leagues
Club Limited v. Commissioner
of Taxation (1990) 23 FCR 82;
90 ATC 4215; (1990) 21 ATR
300
– Crystal Palace Trustees v.
Minister of Town and Country
Planning [1950] 2 All ER 857
– Cunnack v. Edwards [1896] 2
Ch 679
– D v. Bryant Trust Board v. Hamilton City Council [1997] 3
NZLR 342
– Davies v Perpetual Trustee Company [1959] AC
439;[1959] 2 All ER 128
– Dingle v. Turner [1972] 1 All ER 878; [1972] AC 601
– Dorothea Yates v. University College, London and
C.T.D’Eyncourt (1874-5) 7 AC
438.
– Douglas and Ors v. Federal Commissioner of Taxation
(1997) 77 FCR 112; 97 ATC
4722; (1997) 36 ATR 532
– Doust v. Attorney-General (1904) 4 SR (NSW) 577
– Downing v. Federal
Commissioner of Taxation (1971) 125 CLR 185 [1971] HCA 38 71 ATC 4164 (1971) 2
ATR 472
– Dunne v. Byrne [1911-13] All ER Rep 1105; 16 CLR 500;
[1912] AC 407; [1912] HCA 4
– Educational Fees Protection Society Inc v. Commissioner of
Inland Revenue [1992] 2 NZLR
115
– Everywoman’s Health Centre
Society (1988) v. Minister of
National Revenue [1992] 2 FC
52
– FC of T v. Aid/Watch Inc (2009) 178 FCR 423 [2009] FCAFC 128 2009 ATC 20-131
(2009) 74 ATR 19
– Federal Commissioner of
Taxation v. Cappid Pty Ltd
(1971) 127 CLR 140 71 ATC
4121 (1971) 2 ATR 319
– Federal Commissioner of Taxation v. Word Investments
Ltd (2007) 164 FCR 194;
[2007] FCAFC 171
– Federal Commissioner of Taxation v. Word Investments
Ltd (2008) 236 CLR 204 [2008] HCA 55;
– Flynn and Ors v. Mamarika
and Ors (1996) 130 FLR 218
– Freeman and Ors v.
Attorney-General for New
South Wales [1973] 1 NSWLR
729
– General Nursing Council for England and Wales v. St
Marylebone Corporation [1959] 1 All ER 325
– Gilmour v. Coats and Ors [1949] 1 All ER 848; [1949] AC
426
– Greater Wollongong City Council v. Federation of New
South Wales Police Citizens
Boys’ Clubs (1957) 2 LGRA 54
– Guaranty Trust Company of
Canada v. The Minister of
National Revenue [1967] SCR
133
– Hilder v. Church of England Deaconess’ Institution Sydney
Ltd and Ors [1973] 1 NSWLR
506
– Hixon v. Campbell and Ors
(1924) 24 SR (NSW) 436

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– Hoare v. Hoare [1886-90] All
ER Rep 553
– In re Benham [1939] SASR 450
– In re Cain (deceased); The
National Trustees Executors
and Agency Co of Australasia
Ltd v. Jeffrey [1950] VLR 382
– In re Delaney; Conoley v. Quick [1902] 2 Ch 642
– In re Delmar Charitable Trust
[1897] 2 Ch 163
– In re Driffill (deceased); Harvey
and Anor v. Chamberlain and
Ors [1950] 1 Ch 92
– In re Forster; Gellatly v.
Palmer [1939] 1 Ch 22; [1938] 3 All ER 767
– In re Harris Scarfe Limited
[1935] SASR 433
– In re Income Tax Acts (No 1) [1930] VLR 211
– In Re Lambert (deceased) [1967] SASR 19
– In Re Niven (deceased)
(Unreported, Supreme Court of
Western Australia, Kennedy J,
19 June 1987)
– In re Pleasants; Pleasants v. Attorney-General (1923) 39
TLR 675
– In re Scarisbrick’s Will Trusts; Cockshott v. Public Trustee
and Ors [1951] Ch 622 [1951] 1 All ER 822
– In re Stephens; Giles v.
Stephens [1892] 8 TLR 792
– In re Sussanah D. Barker (deceased); Sherrington v.
Dean and Chapter of St Paul’s
Cathedral and Ors (1909) 25
TLR 753
– In re Tetley; National Provincial and Union Bank of
England Ltd v. Tetley [1928] 1
Ch 258
– In re The Henry Wood National Memorial Trust; Armstrong and
Ors v. Moiseiwitsch and Ors
[1966] 1 WLR 1601
– In re Watson (deceased);
Hobbs v. Smith and Ors [1973] 3 All ER 678
– In re Williams; Public Trustee v. Williams [1927] 2 Ch 283
– In the Estate of Schultz;
Playford v. University of Adelaide and Ors [1961] SASR
377
– In the matter of the Clergy Society (1856) 2 K & J 615
– Inland Revenue
Commissioners v. Baddeley
and Ors [1955] 1 All ER 525
– Inland Revenue
Commissioners v. City of
Glasgow Police Athletic
Association [1953] 1 All ER
747 [1953] AC 380
– Inland Revenue
Commissioners v. McMullen
and Ors [1980] 1 All ER 884
– Inland Revenue
Commissioners v. Trustees of
Roberts Marine Mansions
(1927) 43 TLR 270
– Institution of Civil Engineers v. Commissioners of Inland
Revenue [1932] 1 KB 149
– Institution of Professional Engineers New Zealand Inc. v.
Commissioner of Inland
Revenue [1992] 1 NZLR 570
– Ip Cheung-Kwok v. Sin Hua Bank Trustee Ltd and Ors
[1990] 2 HKLR 499
– J.C. Abbott, J. Cowan and F. Torrance v. J. Fraser and Ors
(1874) LR 6 PC 96
– Joseph Rowntree Memorial
Trust Housing Association Ltd
and Ors v. Attorney-General
[1983] 1 All ER 288
– Kaikoura County v. Boyd [1949] NZLR 233
– Kearins v. Kearins (1957) SR
(NSW) 286; (1956) 57 SR
(NSW) 286; (1956) 74 WN
(NSW) 63
– Keren Kayemeth Le Jisroel Limited v. Commissioners of
Inland Revenue [1931] 2 KB
465
– Keren Kayemeth Le Jisroel Limited v. Commissioners of
Inland Revenue [1932] AC 650
– Kindergarten Union of NSW Incorporated v. Waverley
Municipal Council (1960) 5
LGRA 365
– Kytherian Association of Queensland and Anor v.
Sklavos (1958) 101 CLR 56

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– Laing v. Commissioner of
Stamp Duties [1948] NZLR
154
– Latvian Co-operative Society Limited v. Commissioner of
Land Tax (Vic) 3 VAR 242;
(1989) 20 ATR 3641; 89 ATC
2042
– Le Cras v. Perpetual Trustee Co Ltd and Ors; Far West
Children’s Health Scheme and
Ors v. Perpetual Trustee Co.
Ltd and Ors [1967] 3 All ER
915
– Lemm v. Federal Commissioner of Taxation
(1942) 66 CLR 399
– Lloyd and Anor v. Federal Commissioner of Taxation
(1955) 93 CLR 645
– London Hospital Medical College v. Inland Revenue
Commissioners and Anor
[1976] 2 All ER 113
– Lord Nuffield as Ordinary
Trustee of the Nuffield
Foundation v. Commissioners
of Inland Revenue; Trustees of
the Nuffield Provident
Guarantee Fund v.
Commissioners of Inland
Revenue (1947) 28 TC 479
– Maughan v. Federal
Commissioner of Taxation
(1942) 66 CLR 388
– McGarvie Smith Institute v.
Campbelltown Municipal
Council (1965) 11 LGRA 321
– McGovern and Ors v.
Attorney-General and Anor
[1981] 3 All ER 493
– McGrath and Anor v. Cohen
and Ors [1978] 1 NSWLR 621
– McGregor v. Commissioner of Stamp Duties [1942] NZLR
164
– Metropolitan Fire Brigades Board v. Federal
Commissioner of Taxation
(1990) 27 FCR 279; 91 ATC
4052; (1990) 21 ATR 1137
– Minahan and Anor v. Commissioner of Stamp Duties
(NSW) (1926) 26 SR (NSW)
480
– Mines Rescue Board of New
South Wales v. Federal Commissioner of Taxation
(2000) 101 FCR 91; 2000 ATC
4580; (2000) 45 ATR 85
– Minister of National Revenue v. Trusts and Guarantee Co
Ltd [1939] 4 All ER 149 [1940] AC 138
– Molloy v. Inland Revenue
Commissioner (NZ) (1977) 8
ATR 323
– Monds v. Stackhouse and Ors
(1948) 77 CLR 232
– Muir v. Archdall (1918) 19 SR
(NSW) 10
– Murdoch v. Attorney-General (1992) 1 Tas SR 117
– National Anti-Vivisection Society v IRC
[1948] AC 31
– Native Communications Society of BC v. Minister of
National Revenue [1986] 3 FC
471
– Navy Health Limited v. Federal Commissioner of Taxation
(2007) 163 FCR 1; [2007] FCA
931; 2007 ATC 4568; 68 ATR
215
– New Zealand Society of Accountants v. Commissioner
of Inland Revenue [1986] 1
NZLR 147
– Oppenheim v. Tobacco
Securities Trust Co. Ltd and
Ors [1951] AC 296; [1951] 1
All ER 31
– Over-Seventies Housing Association v. Westminster
City Council (1974) 21 RRC 48
– Pamas Foundation (Inc) v. Commissioner of Taxation
(1992) 35 FCR 117; 92 ATC
4161; (1992) 23 ATR 189
– Perpetual Trustee Co Ltd v. Groth and Ors [1985] 2
NSWLR 278
– Perpetual Trustee Co Ltd v. Wittscheibe (1940) 40 SR
NSW 501; (1940) 57 WN
(NSW) 166
– Perpetual Trustees Tasmania
Ltd v. The State of Tasmania
[2000] TASSC 68;
– Peterborough Royal Foxhound Show Society v.
Commissioners of Inland
Revenue [1936] 1 All ER 813

Taxation Ruling
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– Pigs Marketing Board
(Northern Ireland) v.
Commissioners of Inland
Revenue (1945) 26 TC 319
– Presbyterian Church of New
Zealand Beneficiary Fund v.
Commissioner of Inland
Revenue [1994] 3 NZLR 363
– R v. The Assessors of the Town of Sunny Brae [1952] 2
SCR 76
– Re Allsop (deceased); Gell v.
Carver (1884) 1 TLR 4
– Re Australian Institute of Management (Vic) and
Commissioner of State
Revenue (Vic) 9 VAR 222; 95
ATC 2179
– Re Banfield (deceased);
Lloyd’s Bank Ltd v. Smith and
Ors [1968] 2 All ER 276
– Re Berridge; Berridge v. Tune
(1890) 90 LT 55
– Re Blyth [1997] 2 Qd R 567
– Re British School of Egyptian Archaeology; Murray and Ors
v. Public Trustee and Ors
[1954] 1 All ER 887
– Re Clarke (deceased); Bracey v. Royal National Lifeboat
Institution [1923] All ER Rep
607
– Re Clifford; Mallam v. McFie
[1911-13] All ER Rep 1284
– Re Compton; Powell v. Compton [1945] 1 All ER 198
– Re Corelli (deceased); Watt and Ors v. Bridge and Ors
[1943] 2 All ER 519
– Re Cottam’s Will Trusts; Midland Bank Executor and
Trustee Co. Ltd and Anor v.
Huddersfield Corporation and
Ors [1955] 1 WLR 1299 [1955] 3 All ER 704
– Re Davis (deceased); Watts v. Davis & Westralian Farmers
Co-operative Limited [1965] WAR 25
– Re Douglas; Obert and Ors v. Barrow [1886-90] All ER Rep
228
– Re Elmore (deceased) [1968] VR 390
– Re Gillespie (deceased) [1965] VR 402 – Re Good; Harrington v. Watts
[1904-7] All ER Rep 476
– Re Gwilym, deceased [1952] VLR 282
– Re Hargreaves [1973] Qd R
448.
– Re Hilditch, deceased (1986) 39 SASR 469
– Re Hoey [1994] 2 Qd R 510
– Re Hood; Public Trustee v. Hood [1930] All ER Rep 215
– Re Hopkins’ W ill Trusts; Naish
and Anor v. Francis Bacon
Society Incorporated and Ors
[1964] 3 All ER 46
– Re Hummeltenberg; Beatty v.
London Spiritualistic Alliance
[1923] All ER Rep 49
– Re Inman (deceased) [1965] VR 238
– Re Koeppler’s Will Trusts; Barclays Bank Trust Co. Ltd. v.
Slack and Ors [1985] 2 All ER
869
– Re Koettgen (deceased);
Westminster Bank Ltd and
Anor v. Family Welfare
Association Trustees, Ltd and
Ors [1954] 1 All ER 581
– Re Le Cren Clarke (deceased); Funnell and Anor
v. Stewart and Ors [1996] 1 All
ER 715
– Re Levien (deceased); Lloyds Bank Ltd v. Worshipful
Company of Musicians and
Ors [1955] 3 All ER 35
– Re Lopes; Bence Jones v. Zoological Society of London
[1930] All ER Rep 45
– Re MacDuff; MacDuff v. MacDuff [1895-9] All ER Rep
154
– Re Maclachlan; Maclachlan v.
Campbell and Ors (1900) 26
VLR 548
– Re Mariette; Mariette v. Aldenham School Governing
Body [1914-15] All ER Rep
794
– Re Mason (deceased) [1971] NZLR 714
– Re Mead’s Trust Deed;
Briginshaw and Ors v. National
Society of Operative Printers
and Assistants and Anor
[1961] 2 All ER 836

Taxation Ruling
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– Re Mellody; Brandwood v.
Haden [1916-17] All ER Rep
324
– Re Mills (deceased) (1981) 27 SASR 200
– Re Mitchner (deceased);
Union Trustee Company of
Australia and Anor v.
Attorney-General for the
Commonwealth of Australia
and Ors [1922] St R Qd 39
– Re Municipal Orchestra Endowment Fund [1999] QSC
200
– Re Niyazi’s Will Trusts [1978] 1 WLR 910; [1978] 3 All ER
785
– Renmark Hotel Inc v. Federal Commissioner of Taxation
(1949) 79 CLR 10
– Re North Devon and West Somerset Relief Fund Trusts;
Hylton (Baron) and Anor v.
Wright and Anor [1953] 2 All
ER 1032
– Re Nottage; Jones v. Palmer [1895-9] All ER Rep 1203;
[1895] 2 Ch 649
– Re Pardoe; McLaughlin v. Attorney-General [1906] 2 Ch
184
– Re Patten; Westminster Bank v. Carlyon [1929] All ER Rep
416
– Re Payne (deceased) [1968] Qd R 287
– Re Pieper (deceased); The Trustees Executors & Agency
Co. Ltd v. Attorney-General
(Vic.) [1951] VLR 42
– Re Pinion (deceased); Westminster Bank Ltd v.
Pinion and Anor [1965] Ch 85;
[1964] 1 All ER 890
– Re Price; Midland Bank,
Executor and Trustee Co Ltd
v. Harwood and Ors [1943] 2
All ER 505
– Re Producers’ Defence Fund [1954] VLR 246
– Repromed Pty Ltd v. Lucas
and Anor (2000) 76 SASR 575
– Re Queenstown Lakes
Community Housing Trust
[2011] NZHC 617
– Re Raine (deceased); Walton
v. Attorney-General and Anor [1956] 1 All ER 35; [1956] Ch
417
– Re Royce; Turner v. Wormald and Ors [1940] 2 All ER 291
– Re Shakespeare Memorial
Trust; Earl of Lytton v.
Attorney-General [1923] All ER
Rep 106
– Re Shaw (deceased); Public Trustee v. Day and Ors [1957] 1 All ER 745
– Re Shaw’s Will Trusts; National Provincial Bank Ltd v.
National City Bank Ltd and Ors
[1952] 1 All ER 49
– Re SIM Australia as Trustee
for SIMAID Trust and FC of T
[2007] AATA 1443; 66 ATR
908; 2007 ATC 2243
– Re Smith (deceased); Executor Trustee and Agency
Co. of South Australia Ltd v.
Australasian Conference
Association Limited [1954] SASR 151
– Re Smith’s Will Trusts; Barclays Bank Ltd v.
Mercantile Bank Ltd and Ors
[1962] 2 All ER 563
– Re Trusts of Hobourn Aero Components Ltd’s Air Raid
Distress Fund; Ryan and Ors
v. Forrest and Ors [1946] 1 All
ER 501
– Re Tyrie (deceased) [1970] VR 264
– Re Verrall; National Trust for Places of Historic Interest or
National Beauty v.
Attorney-General [1914-15] All
ER Rep 546
– Re Weaver; Trumble v. Animal
Welfare League of Victoria
[1963] VR 257
– Re Webber (deceased);
Barclays Bank Ltd v. Webber
and Ors [1954] 3 All ER 712
– Re White’s Will Trusts; Tindall
v. Board of Governors of the
United Sheffield Hospitals and
Ors [1951] 1 All ER 528
– Re Wilson’s Grant; Fidelity Trustee Co Ltd v. Johnson
[1960] VR 514
– Re Windsor Medical Services Inc (1971) 2 OR 141

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– Rex v. The Special
Commissioners of Income Tax;
(ex parte The Headmasters’
Conference); Rex v. The
Special Commissioners of
Income Tax (ex parte the
Incorporated Association of
Preparatory Schools) (1925)
10 TC 73
– Re Young’s Will Trusts; Westminster Bank Ltd v.
Sterling and Ors [1955] 1 WLR
1269 [1955] 3 All ER 689
– Rowston v. Commissioner of Land Tax 84 ATC 4086; (1984)
15 ATR 366
– Royal Australasian College of Surgeons v. Federal
Commissioner of Taxation
(1943) 68 CLR 436; (1943) 7
ATD 289
– Royal Choral Society v.
Commissioners of Inland
Revenue [1943] 2 All ER 101
– Royal College of Surgeons of
England v. National Provincial
Bank Ltd and Ors [1952] 1 All
ER 984
– Said v. Barrington [2001] NSWSC 576
– Salvation Army (Victoria)
Property Trust v. Fern Tree
Gully Corporation (1952) 85
CLR 159
– Sargeants Charitable Foundation Ltd v. Chief
Commissioner of State
Revenue [2005] NSWSC 659;
2005 ATC 4632; 60 ATR 129
– Schellenberger v. The Trustees Executors and
Agency Company Limited and
Anor (1952) 86 CLR 454
– Scottish Burial Reform and Cremation Society Ltd v.
Glasgow City Corporation
[1967] 3 All ER 215
– Smith v. Kerr [1902] 1 Ch 774
– Social Ventures Australia
Limited v. Chief Commissioner
of State Revenue [2008] NSWADT 331
– Society of Writers to Her
Majesty’s Signet v.
Commissioners of Inland
Revenue (1886) 14 Court Sess
Cas (4th Series) 34 – Southwood v.
Attorney-General [2000] WTLR
1199 (2000) 150 NLJ 1017
– Strathalbyn Show Jumping Club Inc. v. Mayes and Ors
[2001] SASC 73
– Stratton v. Simpson (1970) 125 CLR 138; [1970] HCA 45
– Sulley (Surveyor of Taxes) v.
Royal College of Surgeons,
Edinburgh (1892) 3 Tax Cas.
173
– Swifte v. Attorney-General
[1912] 1 IR 133
– Tasmanian Electronic Commerce Centre Pty Ltd v.
Commissioner of Taxation
(2005) 142 FCR 371; [2005] FCA 439; 2005 ATC 4219; 59
ATR 10
– Taylor and Anor v. Taylor and Ors (1910) 10 CLR 218
– The Abbey, Malvern Wells Ltd v. Minister of Town and
Country Planning [1951] 2 All
ER 154
– The Attorney General for New South Wales v. The Perpetual
Trustee Company Limited and
Ors (1940) 63 CLR 209
– The Attorney-General of New
Zealand v. The New Zealand
Insurance Company Ltd and
Ors [1936] 3 All ER 888
– The Boy Scouts Association, NSW Branch v. Sydney City
Council (1959) 4 LGRA 260
– The Church of the New Faith v. The Commissioner of
Pay-roll Tax (Victoria) (1983)
154 CLR 120 [1983] HCA 40
(1983) 14 ATR 769 83 ATC
4652
– The Commissioners for Special Purposes of Income
Tax v. Pemsel [1891] AC 531;
[1891-4] All ER Rep 28
– The Commissioners of Inland
Revenue v. Forrest [1890] 15
AC 334
– The Commissioners of Inland
Revenue v. The Society for the
Relief of Widows and Orphans
of Medical Men and The
Commissioners of Inland
Revenue v. The Medical
Charitable Society for the West

Taxation Ruling
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Page 104 of 105 Page status: not legally binding
Riding of Yorkshire (1926) 11
TC 1
– The Corporation of Foreign Bondholders v. Inland
Revenue Commissioners
[1944] 1 All ER 420
– The Diocesan Trustees of
Church of England in Western
Australia v. The
Solicitor-General; The Home of
Peace for the Dying and
Incurable v. The
Solicitor-General (1909) 9 CLR
757
– The Free Daist Communion of Australia Limited v.
Comptroller of Stamps (Vic) 88
ATC 2001; (1987) 19 ATR
3104
– The Hobart Savings Bank and The Launceston Bank for
Savings v. Federal
Commissioner of Taxation
(1930) 43 CLR 364
– The Honourable Company of
Master Mariners v. The
Commissioners of Inland
Revenue (1932) 17 TC 298
– The Incorporated Council of Law Reporting of the State of
Queensland v. Federal
Commissioner of Taxation
(1971) 125 CLR 659; 71 ATC
4206; (1971) 2 ATR 515
– The King v. Special Commissioners of Income Tax;
ex parte Essex Hall [1911] 2
KB 434
– The President, Councillors and
Ratepayers of the Shire of
Nunawading v. The Adult Deaf
and Dumb Society of Victoria
(1921) 29 CLR 98
– The Roman Catholic Archbishop of Melbourne v.
Lawlor and Ors; His Holiness
the Pope v. National Trustees,
Executors and Agency
Company of Australasia and
Ors (1934) 51 CLR 1
– The Royal National Agricultural
and Industrial Association v.
Chester and Ors (1974) 48
ALJR 304
– The Royal North Shore Hospital of Sydney v.
Attorney-General for New South Wales and Ors (1938)
60 CLR 396
– The Young Men’s Christian Association of Melbourne v.
Federal Commissioner of
Taxation (1926) 37 CLR 351
– Theosophical Foundation Pty Ltd v. Commissioner of Land
Tax (NSW) (1966) 67 SR
(NSW) 70
– Thompson and Anor v. Federal
Commissioner of Taxation
(1959) 102 CLR 315
– Townley v. Bedwell (1801) 6 Ves 195
– Trustees of Sir Howell Jones
Williams’ Trusts v. Inland
Revenue Commissioners
[1947] 1 All ER 513
– Trustees of the Allport Bequest v. FC of T (1988) 88 ATC
4436; (1988) 19 ATR 1335
– Trustees of the Dean Leigh
Temperance Canteen v.
Commissioners of Inland
Revenue (1958) 38 TC 315
– Trustees of the Indigenous Barristers’ Trust v. Federal
Commissioner of Taxation
(2002) 127 FCR 63; [2002] FCA 1474; 2002 ATC 5055; 51
ATR 495
– United Grand Lodge of Free
and Accepted Masons of
England v. Holborn Borough
Council [1957] 3 All ER 281
– University of Birmingham and Anor v. Federal Commissioner
of Taxation (1938) 60 CLR
572; (1938) 5 ATD 63
– Verge v. Somerville and Ors [1924] AC 496
– Victorian Women Lawyers’ Association v. Federal
Commissioner of Taxation
(2008) 170 FCR 318; [2008] FCA 983; 70 ATR 138; 2008
ATC 20-035
– Waterson and Ors v. Hendon Borough Council [1959] 2 All
ER 760
– Webb v. O’Doherty [1991] TLR 68 (1991) 3 Admin. L.R. 731
– Whicker v. Hume [1843-60] All ER Rep 450

Taxation Ruling
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Page status: not legally binding Page 105 of 105
– Wilson v. Toronto General
Trusts Corporation et al [1954] 3 DLR 136.
– Yeap Cheah Neo and Ors v. Ong Cheng Neo (1875) LR 6
PC 381
– Ziliani and Anor v. Sydney City Council (1985) 56 LGRA 58

Other references:
– Charities – if unlawful actions occur at
www.ato.gov.au/nonprofit – Decisions of the Charity
Commissioners Vol. 1
(August 1993) 4-13
– Explanatory Memorandum to the Extension of Charitable
Purpose Bill 2004
– Australian Oxford Dictionary, 1999 Oxford University Press,
Melbourne Australia
– The Macquarie Dictionary, [Multimedia], version 5.0.0,
1/10/01

ATO references
NO: 1-30DGJV5
ISSN: 1039-0731
ATOlaw topic: Income Tax ~~ Exempt entities ~~ charity, education,
science and religion
Income Tax ~~ Exempt entities ~~ not for profit and
mutual organisations .