Two Destiny Church charities have been stripped from the charities register – and the controversial church led by Brian and Hannah Tamaki could now face a big tax bill.
1 NEWS producer Simon Plumb can reveal the Department of Internal Affairs has decided to remove the two charities for persistently failing to file annual financial records, which had been missing for two years.
In revealing its decision, Internal Affairs’ independent Charities Registration Board said it was in the public interest to deregister.
The board said that persistent failure to meet the requirements of the Charities Act was a key factor in the decision.
“The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations,” Roger Holmes Miller, chair of the Charities Statement Board said in a statement.
Destiny could now face a significant tax bill as a result of being removed from the register.
On top of being subject to income tax, deregistered charities can also be subject to tax on accumulated assets.
“Recent changes to tax legislation means that a deregistered charity may also need to pay a one-off tax on the accumulated assets that are held as at the date of deregistration. A deregistered charity has twelve months to distribute those assets to another registered charity or give assets to charitable purposes. Assets which have not been distributed within twelve months of deregistration will be taxed,” states the Charities Services website.
Earlier this month 1 NEWS reported that instead of filing annual returns, Destiny instead lodged a late objection with the Department of Internal Affairs in a last-gasp bid to hold on to tax-free privileges for the two charities.
Under the Act, the charities concerned have the option to lodge an appeal against the Board’s decision with the High Court by 20 December 2017, and will remain on the register until that time.
INTERNAL AFFAIRS STATEMENT IN FULL:
“The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations.
“The role of the independent Charities Registration Board (“the Board”) is to maintain the integrity of the Charities Register (“the Register”) by ensuring that entities on the Register qualify for registration and meet their obligations under the Charities Act 2005 (“the Act”).
“The Board can direct charities to be removed from the Charities Register when they persistently fail to meet their obligations under the Act and it is in the public interest to remove them.
“The Department of Internal Affairs (“the Department”) sent notices to Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited advising the charities of the Department’s intention to remove them from the Register for their persistent failure to file annual returns. The notices were part of the Department’s standard practice for charities that have persistently failed to file annual returns.
“The charities filed formal objections to the Department’s notices. These objections were considered by the independent Board at its meeting on 21 November 2017.
“The Board considered the objections but was satisfied that it is in the public interest to proceed with the removal of the charities from the Register. The Board was also satisfied that the grounds for removal have been met as there has been a persistent failure by the charities to meet their obligations under the Act. The Board in particular noted the history of non-compliance with annual return obligations. The Board considered that the integrity of the Charities Register would not be maintained if charities persistently fail to meet their obligations to file annual returns under the Act.
“Under the Act, the charities concerned have the option to lodge an appeal against the Board’s decision with the High Court by 20 December 2017, and will remain on the register until that time.”