Determine applicability and thresholds at the outset: Before taking an AG route under s 4 or s 7F, trustees must determine whether the corpus meets the eligible property thresholds in s 1A. Confirm whether any Order under s 4A has altered the $500,000/$50,000 benchmarks and whether the Order has survived the parliamentary disallowance period (s 4B). If the property qualifies as eligible, trustees may choose the administrative AG pathway; otherwise court application remains necessary.
Prepare and lodge properly documented written applications: Applications to the Attorney-General under s 4, s 5 or s 7F must be in writing and accompanied by any prescribed fee (s 4(1), s 5(1), s 7F(2)(c)). Regulations under s 7 may prescribe forms and sliding-scale fees. Applications should specify the property or class of trusts (s 7D(2), s 7F(2)(b)) and be supported by full factual disclosure to avoid the trustee later being found to have relied on advice given in ignorance of material facts (s 5(3)).
Conduct reasonable inquiries and advertise where required for donor claims: Where property might be treated as given by unidentified donors, trustees should follow s 3: for box collections and general fundraising proceeds the statute creates a conclusive presumption (s 3(2)); for other gifts trustees should undertake reasonable steps to identify donors and document inquiries because s 3(3) permits the court to treat property as from unidentified donors only where it appears unreasonable to locate donors. If the trustees propose a scheme for cy près application, the scheme must specify total amounts and provide for claimant recovery within 12 months (s 3(4)(a)-(b)). Keep records of advertisements and inquiries to support any later reliance on the statutory presumption or a s 3(3) application.
When using Part IA (common funds), comply with distribution, deduction and governance rules: Trustees operating an investment common fund must distribute income periodically with regard to participation (s 7B(3)), may add income to capital or create reserves (s 7B(4)), and may deduct up to 5% of annual income as commission (s 7B(5)-(6)). Any other charges require trust-instrument authority (s 7B(7)). Ensure that AG approvals or court Orders under Part IA are followed precisely and that trust instruments are reconciled with common fund rules. If relying on AG approval for the liability shield, keep a record of the approval and its conditions (s 7H(2)-(4)).
Execute the Schedule declaration where distributions to government-connected entities are intended: To apply s 7K, trustees must have in force a declaration in the Schedule form (s 7K(3); Sch). The Schedule requires trustees to consider income tax consequences; obtain tax advice and ensure the declaration is executed as a deed. Maintain evidence of consideration of the factors in s 7K(7) regarding the extent of government connection.
Respond to information requirements and inquiries promptly and accurately: If the Attorney-General issues a written requirement under s 9A, it must (i) identify the information required, (ii) specify by when the requirement must be complied with (not less than one month) and (iii) specify the form for giving the information (s 9A(2)). Failure to comply without reasonable excuse is an offence with a penalty of 60 penalty units (s 9B). Provide complete, timely and documented responses and consult legal counsel where questions of privilege, confidentiality or self-incrimination might arise. Where an inspector requests documents, do not destroy, conceal or remove them; s 16 prescribes grave penalties for such acts.
Maintain and make available examination records: If an inspection and examination occur, inspectors will record the examination and provide the examinee a chance to sign (s 11). A signed copy must be provided free of charge on request (s 11(6)). Keep copies of records and transcripts, and ensure internal processes are in place to handle such requests and to preserve chain of custody for documents.
Manage costs risk: Be aware that the Attorney-General may determine inquiry costs and seek recovery from trustees, executors or the charity (s 15). If an inquiry is likely, consider securing funds or insurances and comply with any security requirements for applicants under s 9(2)(b). Where seeking an AG pathway, assess upfront the fee implications under regulations and the likelihood of the Attorney-General directing costs to the charity.
Use legal and tax advice when seeking AG opinions or approvals: Given the protections for trustees acting on AG opinions or approvals (s 5(3), s 4(5), s 7H(4)) are contingent on full disclosure and lack of ignorance of material facts, ensure comprehensive factual disclosure in any application and seek independent legal and tax advice. For Part IB issues (s 7K), seek tax advice regarding DGR status and income tax effects before executing the Schedule declaration.
Document governance of investment common funds: If establishing common funds, adopt written rules on valuation, periodic distribution, how participation is measured, rules on bringing in and withdrawing property (s 7B(2)-(3)), commissions and any permitted additional charges (s 7B(5)-(7)). Keep clear accounts showing commission calculations to withstand inquiries.
Track statutory and regulatory changes: Because Orders under s 4A and regulations under s 7 may change operational parameters (fees, forms, monetary thresholds), trustees should maintain a compliance calendar and periodically review government Gazette notices and subordinate legislation. Confirm whether an Order altering monetary limits has been disallowed by Parliament within the disallowance window (s 4B).
Preserve documents and records: Given the criminal penalties in s 16 for interfering with documents, adopt preservation policies for records related to trusts and charities. When transferring or disposing of documents, obtain legal advice to ensure compliance with retention obligations and to avoid inadvertent contravention.
Engage with the court when appropriate: Even where AG approval may be available, court proceedings under s 7D remain an option and may be preferable where legal certainty, precedent or final judicial determination is required. The court can grant Orders under s 7D and exercise charity jurisdiction including trustee removal under s 13.
In all steps, maintain contemporaneous, transparent records of decisions, disclosures to the Attorney-General or inspectors, and the factual basis for any reliance on statutory protections. That documentation is the practical foundation for the liability shields and for defending against any later challenge or application for costs under s 15.