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A registered charity may be removed from the Charities Register (deregistered) under the Charities Act 2005, either by request or on a decision by the independent Charities Registration Board.
The following information addresses the deregistration process and what happens after deregistration.
Charitable status is voluntary in New Zealand. A charity may ask to be deregistered at any time and for any reason. For example, a charity may request deregistration if it is winding-up and will cease to exist.
An officer of the charity, or an authorised person, will need to complete a deregistration form.
You can find this form by logging on to your account,(external link) and clicking on the “Deregister” tab on your charity’s online account.
The form has been developed following recent changes to tax legislation that mean a deregistered charity may need to pay a one-off tax on the accumulated assets that are held as at the date of deregistration. Further details about this can be found below.
The form captures information about the reasons for deregistration, the value of the charity’s assets and liabilities at the time of deregistration, and what the charity has done (or intends to do) with any accumulated assets and income. A summary of this information will appear on the charities register, and will be available to Inland Revenue.
Registered charities are eligible for charitable tax status. However, when a charity is deregistered it will become liable for income tax. This applies unless the charity qualifies for another tax exemption. For example, if a sports club is deregistered, they might instead qualify for a tax exemption as an amateur sports body.
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.
Alternatively, if the charity re-applies and is again registered as a charity within twelve months of deregistration, they will not be taxed on their accumulated assets.
A deregistered charity may also lose their eligibility to provide receipts for donees to claim tax rebates.
Charities Services advises Inland Revenue when charities are deregistered. We strongly advise that you contact Inland Revenue to discuss your tax situation if your charity is considering deregistration and holds assets.
Go to Inland Revenue’s website to learn more >(external link)
All decisions about the deregistration of charities are made by the independent Charities Registration Board.
In some clear cases of non-compliance, for example where charities have failed to file their annual returns over two or more years, the Charities Registration Board has delegated authority to Charities Services to act on their behalf.
Charities Services is also responsible for notifying organisations for the grounds that they do not qualify and providing the final decision to the organisation.
Yes. The Charities Registration Board has the authority to deregister a charity that:
However, deregistration will not happen without the charity being given the chance to have its say on the matter. The charity and any officer of the charity can object on either or both of the following grounds:
If an objection is received from a charity that the Charities Registration Board is considering deregistering, it must not deregister it unless it is satisfied that:
If your charity receives a notice saying that the Charities Registration Board intends to remove it from the Register, you have the right to object – but it is important that you do so within the timeframe stated in the notice. If the Charities Registration Board doesn't hear from a charity within the stated timeframe, we will begin steps to formally deregister the charity. Contact Charities Services as soon as you can even if it is to confirm that you have received the notice and will be making an objection.
If the Charities Registration Board proceeds to deregister the charity, it will advise the charity in writing, and give reasons for the decision.
The following details will be shown on the Charities Register after a charity has been deregistered:
Below are plain-language explanations of the published grounds that appear on the Charities Register after a charity has been deregistered:
Only those charities currently on the Charities Register are eligible for certain charitable tax benefits. We advise Inland Revenue when we remove charities from the Register.
Deregistered organisations should contact Inland Revenue to discuss their tax liabilities.
A deregistered charity must no longer:
If the charity is an incorporated society, it must go back to filing returns with the Companies Office.
Some funding may not be available as some funders have policies that mean they only support charities that are on the Charities Register.
In all cases where a charity wishes to go back on the Charities Register after it has been deregistered, it will need to re-apply. The charity will need to log into its online account and complete a re-application form. As part of this form it will need to provide updated information about its activities, certify each of its officers and provide a copy of its rules and any other documents, which may include financial reports, as required.
However, section 31(4) of the Act says that the Charities Registration Board may order that:
Before the Charities Registration Board makes one of these orders, however, it must notify the charity that it is intending to do so and give the charity a reasonable time to make submissions on the matter.