Charitable Trusts can be set up for a number of reasons, but they must be for public purpose or public benefit, including:
If these conditions are met, the trust can usually gain IRD tax-exempt status. Payments or asset transfers to charitable trusts are not subject to gift duty. Charitable Trusts are established under a trust deed that sets out the objectives of the trust and the criteria for making distributions. Distributions can be regular or one-off and are usually made from income. A Charitable Trust can support more than one organisation or cause.
The objectives can be broad and leave discretion to the trustee - in fact if the conditions are too stringent it can cause difficulties, for example the prescribed organisation may no longer exist, so it could be difficult to distribute funds without contravening the trust deed.
There may be a cause or organisation that you passionately support - or perhaps you simply feel it is important to help those in need. Most people make donations to charity, but if you wish to leave a longer-term legacy, Charitable Trusts are a way to support causes and organisations you care about. Charitable Trusts provide a way for you to give long-term support to charities or causes you wish to support.
The trust protects the capital invested, while distributions are made to charitable causes at the trustee's discretion.
The Charities Commission was established recently to monitor and regulate the charitable sector.
Charities are required to register and be approved by the Commission and provide regular financial reports. Charities that are not registered will not be tax-exempt.
Increased regulation ensures charities act properly, but has also made administration more complex.
Perpetual Trust provides expert advice to you on Charitable Trusts, taking account of your particular aims and circumstances. Charitable Trusts are not appropriate in all circumstances. Trust and Estate Planning
The establishment of a Charitable Trust, or making a charitable bequest in your Will, should be part of a wider review of your asset and succession plans. We take a comprehensive approach as to how your objectives can be met and prepare a complete written plan for you.
Charitable Trust Establishment
Charitable Trusts can be complex to administer, and it is important they are managed properly or the Trust's status could be open to challenge (for example by the IRD). Perpetual Trust provides comprehensive Charitable Trust management services, including:
Please feel free to make an online enquiry and one of our advisers will get back to you. Alternatively you can call your nearest Perpetual Trust office on 0800 737 738 or e-mail us: email@perpetual.co.nz.