Australia High Court Gives Expansive Definition of Tax-Exempt Charity

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