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CW 44: Friendly societies
or “Tax exemptions for friendly societies, with some exceptions”
You could also call this:

“Tax exemption for employer-managed funeral expense funds”

When a trustee manages a fund for funeral expenses, they might receive interest or dividends. This money is exempt from income tax if certain conditions are met. The fund must only be used to pay for funeral expenses of specific people. These people include employees of a company, their partners and dependants, and the surviving family members of deceased employees.

For this exemption to apply, the employer must have at least 10 employees. Everyone who can get benefits from the fund must be able to get the same benefits. Only the employer and employees can put money into the fund. No one else is allowed to contribute.

Finally, the Commissioner of Inland Revenue must approve the fund. If all these conditions are met, the interest or dividends the trustee receives for the fund won’t be taxed as income.

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Next up: CW 46: Bodies promoting amateur games and sports

or “Tax exemption for groups promoting amateur games and sports”
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Part C Income
Exempt income

CW 45Funeral trusts

  1. Interest or a dividend derived by a trustee in trust for a fund is exempt income if, when the interest or dividend is derived by the trustee,—

  2. the sole purpose of the fund is the payment of the expenses associated with the funerals of—
    1. employees of an employer:
      1. spouses, civil union partners, de facto partners, and dependants of employees of the employer:
        1. surviving spouses, civil union partners, de facto partners, and surviving dependants of deceased employees of the employer; and
        2. the employer has at least 10 employees; and
          1. all persons eligible for benefits from the fund are eligible equally for benefits from the fund; and
            1. no contributions to the fund are made by a person who is not the employer or an employee of the employer; and
              1. the fund is approved by the Commissioner.

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