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Case Study - NFP - Word Investments Case
Situation:
An Australian charity supported its activities by inviting deposits from its supporters and retaining the interest on the investments of those deposits. Later it started a funeral business to support its activities.
The Australian Taxation Office said that those investments and business activities were not part of the charitable activities and should be taxed.
Response:
Moores Legal advised that if the Tax Office was right, any fundraising activities of a charity would be taxable. This had never been the case in Australia before. Moores Legal represented the charity in the Administrative Appeals Tribunal, the Federal Court of Australia, the Full Court of the Federal Court of Australia and the High Court of Australia as the Tax Commissioner appealed against each decision.
Outcome:
The High Court decided that the activities were proper for a charity and should not be taxed. The decision was hailed by the Not for Profit sector as settling an uncertain part of the law and allowing charities freedom to conduct fund raising to sustain core activities.