![]() The missionary knew that they needed to pay in order to have the experience they wanted. Ms Coward, and any other individual missionary, benefited from their essential expenses being paid, for similar reasons in Hodges v Federal Commissioner of Taxation (1997) where the payment received was service-related.In the matter of the Coward proceeding, Mr Coward’s payments to the Trust were not gifts, so the Commissioner’s disputable decision disallowing Mr Coward’s tax credit in respect of those payments was correct.The Court made the following declarations: Coward proceeding However, the Court found that payments by other relatives of a missionary and other members of the Church were gifts and so may attract a tax deduction under s LD 1. The High Court’s decision The High Court held that WMF payments by a missionary, and parents and grandparents of a missionary were not gifts for the purposes of s LD 1. The Commissioner maintained that they were payments made so that the Church would pay the essential personal expenses of the missionary while on a mission. The Commissioner considered that the WMF payments were made to meet the costs of that missionary’s mission and were not gifts because they were not gratuitously made to the Trust. They were dispositions of property without consideration. Since 2015, the Commissioner had disallowed claims by a missionary and their immediate family, but not (to date) by more remote family, or members of the local district of the Church (a stake), or local ward (a subset of a stake).The plaintiffs considered that the WMF payments were gifts because they were gratuitous payments that were made by Church members to the Trust to support the Church’s charitable work. The Commissioner, as a matter of practice, had allowed all claims for these payments up until 2015. The precise issued to be determined by the Court was whether the WMF payments associated with a missionary’s application, made to the Trust by the following classes of people, were gifts under s LD 1, so entitling the donor to a tax credit: (a) a missionary (b) a parent or legal guardian of a missionary (c) grandparents of a missionary (d) siblings of a missionary (e) a more distant relative of a missionary, such as a cousin, uncle or aunt, and (f) a church member unrelated to the missionary, such as a friend of a missionary or a member of the missionary’s local ward. Both parties considered it would be of assistance to have answers to the wider questions posed in the first proceeding rather than the narrow question of the status of payments made by Mr Coward. This proceeding related to whether the Trust could issue a donation statement for those payments. Mr Coward made the standard payments for his daughter’s application. His daughter was a missionary for the Church. ![]() The plaintiff in the second proceeding was Mr Coward, a member of the Church. The first proceeding raised the broad question of whether the Trust could issue donation statements to any of the categories of people making the relevant payments. The judgment addressed two proceedings, which were heard together, both involving the Commissioner of Inland Revenue as defendant. Once a WMF payment had been made, the funds belonged to the relevant Church-entity for use in its discretion. None of the WMF payments were refundable. This terminology was used by the Church and the Trust internationally. The payments made in support of a missionary were termed “Ward Missionary Fund” or “WMF” payments. The missionaries sent overseas from New Zealand had their expenses paid by the country where they proselytised. The money was not paid towards their mission overseas, but rather towards funding expenses of other missionaries in New Zealand. When they do, they commit to paying or raising a “standard amount” towards supporting the Church’s missionary work. Young members of the Church in New Zealand apply to be missionaries overseas. One of its more prominent activities was sending young men and women to proselytise in different countries to obtain converts to the Church’s mission. The Church of Jesus Christ of Latter-Day Saints (the Church) was based in Salt Lake City, Utah, but had a worldwide presence, including in New Zealand. ![]() However, the Court found that payments by some relatives of a missionary and other members of the Church were gifts and may attract a tax deduction under s LD 1. The High Court has found that some donations made to the Trust Board of the Church of Jesus Christ of Latter-Day Saints (the Trust) by a missionary, their family and others, in connection with the missionary’s application to be a missionary overseas were not charitable gifts under s LD 1 of the Income Tax Act 2007.
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