In a lengthy judgment, the AAT has affirmed the Commissioner’s decision to revoke the endorsement of the Cancer and Bowel Research Trust as a tax deductible gift recipient, although remitted to the Commissioner the issue of whether the taxpayer was a health promotion charity.

The Trust was established by deed made on 20 February 1998. The Commissioner had revoked the endorsements of the Trust as a DGR and as exempt from income tax, FBT and GST. The taxpayer’s objections were disallowed and the matter came before the AAT. The Tribunal said there were 2 matters before it:

  • The primary matter arose from an application to review an objection decision made by the Commissioner on 20 August 2012 to disallow an objection by the taxpayer to the revocation of endorsements previously issued for various charity tax concessions, and of endorsement as a deductible gift recipient (DGR).
  • During the hearing of that application, the AAT said reference was made to an earlier objection decision made by the Commissioner on 29 July 2011 to disallow an objection to the refusal of an application to endorse the taxpayer as a health promotion charity.  The taxpayer applied to the AAT for review of that objection decision, but later withdrew its application.  The Tribunal said it became apparent during the hearing of the primary matter that the earlier application raised issues that were relevant to the primary matter.  At the Tribunal’s suggestion, the taxpayer lodged a second application to review the Commissioner’s earlier objection decision to refuse the application for endorsement as a health promotion charity. This 2nd application was the 2nd matter before the Tribunal. 

The issues before the Tribunal were:

  • whether the taxpayer was entitled to be endorsed as a DGR as at 16 February 2012, being the date of the Commissioner’s decision to revoke its endorsement as a DGR;
  • whether the taxpayer, as trustee for the Trust, was entitled to be endorsed as exempt from income tax, FBT and GST as at 16 February 2012;
  • should any revocation of the endorsements granted to the taxpayer take effect from 1 July 2000, or some other and what date?
  • whether the taxpayer was entitled to be endorsed as a health promotion charity on or after 4 October 2010, being the date of its application for that endorsement; and
  • what was the date at which the Tribunal should determine the above issues?

In the end result, the Tribunal affirmed the Commissioner’s objection decision insofar as it revoked the endorsement of the Trust as a tax deductible gift recipient, and decided that that revocation should take effect from 1 July 2000.

It also remitted the objection decision to the Commissioner for further consideration insofar as the decision related to whether the taxpayer was entitled to be endorsed as an entity exempt from income tax under s 50-105 of the ITAA 1997 and as a charitable institution under s 176-1 of the GST Act and s 123E of the Fringe Benefits Tax Assessment Act 1986.

On the 2nd matter, the Tribunal remitted the objection decision to the Commissioner for further consideration pursuant to s 42D of the AAT Act. The Tribunal specified that the period within which the Commissioner was to reconsider the objection decisions remitted to it was the period commencing on the date of this decision (5 April 2013) and expiring on 23 September 2013.

(AAT Case [2013] AATA 336, Re Cancer and Bowel Research Association Incorporated as trustee for Cancer and Bowel Research Trust and FCT, AAT, Jarvis DP, AAT Ref: 2012/3665 and 2013/1720, 24 May 2013.)

[LTN 102, 29/5/13]

Extract from [2013] AATA 336

CATCHWORDS – TAXATION – Endorsements as tax concession charity and as deductible gift recipient – revocation of endorsements – date at which entitlement to endorsement is to be determined – whether trust deed complied with statutory requirements – whether purposes for which trust had been established were charitable – relevance of related party transactions – whether revocation of endorsements should take effect from a retrospective date – objection decision in part affirmed, and in part remitted for further consideration – objection decision that applicant not entitled to endorsement as a health promotion charity remitted for further consideration.