Section CX 25 — Income Tax Act 2007: Benefits provided by charitable organisations

CX 25 Benefits provided by charitable organisations When not fringe benefit (1) A charitable organisation that provides a benefit to an employee does not provide a fringe benefit except to the extent to which— (a) the employee receives the benefit mainly in connection with their employment; and (b) the employment consists of the carrying on by the organisation of a business whose activity is outside its benevolent, charitable, cultural, or philanthropic purposes. When employer provides charge facilities (2) Subsection (1) does not apply, and the benefit provided is a fringe benefit, if a charitable organisation provides a benefit to an employee by way of short-term charge facilities and the value of the benefit from the short-term charge facilities for the employee in a tax year is more than 5% of the employee’s salary or wages for the tax year. Meaning of short-term charge facilities (3) For the purposes of the FBT rules, a short-term charge facility means an arrangement that— (a) enables an employee of a charitable organisation to obtain goods or services that have no connection with the organisation or its operations by buying or hiring the goods or services or charging the cost of the goods or services to an account; and (b) places the liability for some or all of the payment for the goods or services on the organisation; and (c) is not a fringe benefit under section CX 10 . Defined in this Act: business , charitable organisation , employee , employment , fringe benefit , pay , short-term charge facility Compare: 2004 No 35 s CX 21