Queensland charities will welcome this decision about duties payable on property transactions, as the Commissioner’s view of the law has been at odds with some in the legal profession. The Queensland Law Society has previously made representations to the Commissioner regarding the Queensland Revenue Office’s interpretation of the definition of ‘institution’.
In Queensland, charitable institutions registered under Part 11A of the Taxation Administration Act 2001 may be exempt from paying duties, land tax or payroll tax.
The exemption may apply to religious bodies, public benevolent institutions, universities and university colleges (not charitable institutions for payroll tax), schools, kindergartens and institutions that:
- mainly care for sick, aged or infirm persons
- relieve poverty
- provide full-time care for children (e.g. foster homes)
- are primarily charitable or for the public good (the principal object or pursuit must not be leisure, recreational, social or sporting).
To access the exemptions, it is first necessary for the charity to register with the Queensland Revenue Office (QRO).
For some time, the QLS has received member concerns that the QRO has adopted an understanding of the word ‘institution’ within the Taxation Administration Act 2001 (Qld) (Administration Act) that is preventing the registration of charitable trustees for exemption. Their clients had decided not to pursue the matter through the Courts for various reasons.
The QRO contended that an essential feature of an institution was the requirement of a body of organisations (independent of the trustee) that has been set up to carry on activities or provide services relevant to the purposes of the Trust. QRO maintained that it was clear from the applicable case law that taxation legislation seeks to draw a distinction between a “mere trust” (that is, charitable) and something that is a charitable institution.
The representations made by the QLS to the QRO to the contrary have now been clarified by a recent Queensland Court of Appeal case in Commissioner of State Revenue v Montessori Children’s Foundation [2025] QCA 153.
In that case, the Montessori Children’s Foundation (the Foundation Trustee) was established and registered as a public company limited by guarantee. The objects of the Foundation were to be solely to pursue charitable purposes and accept appointments to act as trustee for charitable trusts.
The primary object of the Trust was to further the education of Indigenous children in the Cape York area, through the application of the Montessori educational philosophy and method. In 2019, the Foundation Trustee transitioned from funding others to deliver services to directly providing Montessori services.
The Foundation Trustee in 2020 entered into contracts to purchase three Cairns properties to conduct a share house business from them, with a view to providing the Trustee with real property assets that generated income and premises from which to conduct its activities and administration.
The QRO refused registration of the Foundation Trustee.
The Foundation Trustee took the decision for review by Queensland Civil and Administrative Tribunal (QCAT), with the only issue being whether the Trust was an “institution”, within the meaning of that term in the Administration Act. The Foundation Trustee was successful.
QRO appealed the decision, and the Appeal Court affirmed the QCAT decision, finding no error of law.
The Appeal Court found that the proper meaning of institution in the Administration Act is to be determined by a consideration of that term in the context of the legislative provision and the Administration Act as a whole, having regard to its legislative purpose. It was not to be given a technical meaning limited by a defined membership, structure or body with a composition of more than 7 members.
Trustees that merely hold trust assets for charitable purposes and merely provide funding to others to deliver services consistent with their charitable purposes are unlikely to fall within the definition of an institution. Those that provide direct services, in this case, the direct delivery of Montessori education to Indigenous children in the Cape York area, may be institutions.
QLS Committees enable members to have direct input into how we advocate to and engage with Parliament and stakeholders to raise issues of concern to the profession and engage in areas of legislative reform important to supporting the profession and the community.
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