Anti-avoidance rules in ITA 2007, s. 539–564 operate to restrict the availability of the exemptions provided by ITA 2007, Pt. 10 for charitable trusts where the trust has a ‘non-exempt amount’ for a tax year (ITA 2007, s. 539(1) and (2)). The result is that the exemptions do not apply and are treated as having never applied to so much of the income of the charity as is attributed to the non-exempt amount.
A charity's non-exempt amount for any tax year period is the lesser of:
•its ‘non-charitable expenditure’ (see below) for that year; and