Commissioner of Taxation of the Commonwealth of Australia v Word Investments Limited [2008] HCA 55

HIGH COURT OF AUSTRALIA

GUMMOW, KIRBY, HAYNE, HEYDON AND CRENNAN JJ

COMMISSIONER OF TAXATION OF THE

COMMONWEALTH OF AUSTRALIA APPELLANT

AND

WORD INVESTMENTS LIMITED RESPONDENT

Commissioner of Taxation of the Commonwealth of Australia v Word Investments Limited

[2008] HCA 55

3 December 2008

M41/2008

ORDER

Appeal dismissed with costs.

On appeal from the Federal Court of Australia

Representation

R Merkel QC with R A Brett QC and D M Harding for the appellant (instructed by Australian Government Solicitor)

J J Batrouney SC with M T Flynn for the respondent (instructed by Moores Legal)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Commissioner of Taxation of the Commonwealth of Australia v Word Investments Ltd

Taxation – Income tax – Charities – Entity engaged in investment business and funeral business – Profits distributed to religious organisations – Whether entity exempt from income tax as "charitable institution" – Income Tax Assessment Act 1997 (Cth), ss 50-1, 50-5, 50-50, 50-52.

Taxation – Income tax – "Charitable institution" – Whether sufficient for entity to have solely charitable purposes – Whether necessary for entity to engage in charitable activities directly – Whether necessary that distributed profits applied for charitable purposes.

Taxation – Income tax – "Charitable institution" – Whether entity's objects in fact confined to charitable purposes.

Taxation – Income Tax – Special condition for "charitable institution" income tax exemption – Income Tax Assessment Act 1997 (Cth), s 50-50(a) – Whether entity has physical presence in Australia – Whether entity "incurs its expenditure and pursues its objectives principally in Australia".

Words and phrases – "charitable institution", "incurs its expenditure and pursues its objectives principally in Australia", "institution".