TAXATION ADMINISTRATION ACT 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 5 - Administration  

PART 5-35 - REGISTRATION AND SIMILAR PROCESSES FOR VARIOUS TAXES  

Division 426 - Process of endorsing charities and other entities  

Subdivision 426-D - Public and private ancillary funds  

Administrative penalties

SECTION 426-120   ADMINISTRATIVE PENALTIES FOR TRUSTEES OF ANCILLARY FUNDS  

Administrative penalty

426-120(1)  
The persons mentioned in subsection (2) are jointly and severally liable to an administrative penalty if:


(a) a trustee of an *ancillary fund holds the fund out as being endorsed, entitled to be endorsed, or entitled to remain endorsed, as a *deductible gift recipient; and


(b) the fund is not so endorsed or entitled.

426-120(2)  
The persons are:


(a) each person who is a trustee of the fund; and


(b) each director of each *constitutional corporation that is a trustee of the fund, if:


(i) any of the penalty cannot reasonably be recovered from the constitutional corporation; and

(ii) the constitutional corporation is neither a licensed trustee company (within the meaning of Chapter 5D of the Corporations Act 2001 ) nor the Public Trustee of a State or Territory.
Note:

A person mentioned in paragraph (2)(a) may, in certain circumstances, not be a constitutional corporation: see item 28 of Schedule 2 to the Tax Laws Amendment (2009 Measures No 4) Act 2009 (former prescribed private funds).

426-120(3)  


The amount of the penalty is:


(a) the amount specified in the *public ancillary fund guidelines under paragraph 426-103(b) , or the *private ancillary fund guidelines under paragraph 426-110(b) , whichever are applicable; or


(b) the amount worked out in accordance with the method specified under that paragraph.

The guidelines may specify different penalties or methods for different circumstances.

426-120(4)  
The penalty must not be reimbursed from the fund.

Note:

Division 298 in this Schedule contains machinery provisions for administrative penalties.

Defences for directors

426-120(5)  
Paragraph (2)(b) does not apply to a director if:


(a) the director was not aware of the holding out mentioned in paragraph (1)(a) and it would not have been reasonable to expect the director to have been aware of that holding out; or


(b) the director took all reasonable steps to ensure that the holding out mentioned in that paragraph did not occur; or


(c) there were no such steps that the director could have taken.

426-120(6)  
In determining what is reasonable for the purposes of paragraph (5)(a), (b) or (c), have regard to all relevant circumstances.

426-120(7)  
A person who wishes to rely on subsection (5) bears an evidential burden in relation to the matters in that subsection. Power of courts to grant relief

426-120(8)  
Section 1318 of the Corporations Act 2001 (power of Court to grant relief in case of breach of director ' s duty) does not apply to a liability of a director under this section.




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