The Tribunal found the applicant companies were established for the purpose of duplicating and taking over the fundraising activities of the charity, Cancer and Bowel Research Association Inc (CBRA Inc) and the trusts it administers. This was because funds raised by CBRA Inc would be required to repay a debt to the Australian Taxation Office (ATO). It found each applicant was formed to seek to terminate or substantially reduce CBRA Inc’s liability to the ATO by taking over its functions and donor lists, leaving it with insufficient assets to pay the liability.
The applicants were refused registration on the basis that they each had a purpose, among others, of providing private benefits to people involved in their operations. The Tribunal found that in deciding whether each applicant was eligible for registration as a charity, the ACNC Commissioner was obliged to consider the circumstances in which each applicant was formed, not just their recorded purposes. It found that the circumstances indicated the applicants did not have solely charitable purposes (or ancillary purposes) as required under the definition of “charity” in the Charities Act 2013. The Tribunal also observed that the purpose of avoiding or limiting the tax liability of CBRA Inc may well be a disqualifying purpose, as defined in the Charities Act, for being contrary to public policy.
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