Charities/NFP - Parry Field Lawyers

IRD recently shared two sets of slides regarding their consultation with charities at the end of 2025.

In this note, we summarise some of the key points they make on a variety of topics. We recommend reviewing the slides yourself (contact Partner, Steven Moe, if you’d like a copy) but this could provide a starting point to show areas that may be of interest.

Donor-controlled charities

Many submitters did not support introducing a bespoke donor-controlled charity regime in the form proposed, preferring better enforcement of existing charity law and fiduciary duties.
Concerns were raised that the proposed definition is too broad and could capture low-risk entities, including certain Māori organisations, iwi entities and widely held structures.
There was support in principle for a minimum distribution rule to ensure tax-benefited funds are regularly applied to charitable purposes.
However, a 5 percent asset-based distribution rate was generally viewed as too high in the New Zealand context. Submitters preferred an income-based approach, flexibility, exemptions and multi-year averaging.
Integrity measures targeting circular arrangements and non-arm’s length transactions were supported conceptually, but many submitters were concerned about complexity and compliance costs.
A cap on donation tax concessions for donations to donor-controlled charities was the least preferred option and was seen as a blunt instrument that could dampen large-scale philanthropy.

Membership subscriptions and member transactions

Inland Revenue has indicated that many member trading and service transactions are taxable under current law, which may bring additional organisations into the tax net.
Submitters expressed concern about compliance impacts, particularly for volunteer-run organisations.
There was strong support for clear, practical guidance with examples.
Many favoured retaining non-taxable treatment for genuine membership subscriptions, with a focus on the substance of transactions.
Some submitters suggested clearer legislative distinctions between commercial trading and social or mutual member activities.

Tax-free threshold

Officials have proposed increasing the long-standing $1,000 tax-free threshold, potentially to $10,000.
There was broad support for increasing the threshold to reflect inflation and reduce compliance costs for smaller organisations.
There was little support for a cliff-face approach that would remove the concession entirely once a threshold is exceeded.
Alternatives suggested included an abating threshold and alignment with financial reporting thresholds.

Filing requirements and RWT exemption

Submitters generally supported simplified filing requirements for small not-for-profits, particularly given their volunteer-led nature.
Education and proportionate compliance responses were preferred over punitive measures.
Concerns were raised about proposals to increase oversight of resident withholding tax exemptions if this shifted compliance costs onto financial institutions.

Donation tax credit simplifications

In-year donation tax credit refunds were broadly supported as a way to improve donor cash flow and potentially support increased giving, provided participation remains voluntary and does not increase administrative burdens on charities.
Allowing donors to allocate their donation tax credit directly to the donee organisation was viewed by many as a potentially more impactful reform.
Practical issues were noted, including donor anonymity, stewardship considerations and whether an allocated credit should itself qualify for a further donation tax credit.

If you have any questions regarding the information above, please contact one of our team.

Published February 2026.

New regulations have provided an interim fix for residents associations left in limbo by new requirements under the Incorporated Societies Act 2022. But as a temporary exemption, residents associations will still need to consider their future structure.

Background

A Residents Association is a type of incorporated society that exists for the benefit of the community it serves. It might maintain community facilities or common areas, or simply serve as a forum for residents to come together and organise community activities. Some Residents Associations will own common land as well.

Most Residents Associations will be registered under the Incorporated Societies Act 1908, which means that they will need to prepare for and re-register under the Incorporated Societies Act 2022. However, the new Act prohibits surplus assets from being distributed to members where the society is wound up.

This will cause issues for many Residents Associations who own common land, as “winding up” provisions often provide that surplus assets should go to the members. For Residents Associations with common land, this ensures that the residents will get a share in the land when and if the society winds up.

This prohibition is to preserve the principle that incorporated societies should not operate for the financial gain of members. However, for Residents Associations that own common land or other property on behalf of residents, if the association was wound up, residents would lose rights to property they justifiably see as being theirs.

What does the exemption mean for residents associations?

In response to these concerns, a temporary exemption has been made allowing Residents Associations to retain the clause in their constitution that enables distribution of surplus assets to members for the transition period.

The exemption is provided for under the Incorporated Society regulations. Residents Associations will still need to re-register under the 2022 Act by the deadline of 5 April 2026. At the same time, they must also notify the Registrar that the constitution they are submitting retains a clause permitting distribution of surplus assets to members if the association winds up.

The temporary exemption will remain in place until 5 October 2028. During this period, Residents Associations must either amend their surplus assets provisions to comply with the Incorporated Societies Act 2022 or consider an alternative ownership structure.

Time to consider an alternative structure?

Although this exemption does not provide a permanent fix for Residents Associations under the new Act, what it does do is provide time for Residents Associations to consider their options and what the best structure will be going forward.

If your Residents Association is in this situation, let us know – we are happy to support you in considering your options moving forward. For further information on how the requirements under the Incorporated Societies Act 2022 will affect Residents Associations, check out this article.

We help with unincorporated and incorporated societies and answer questions all the time. If you would like to discuss further, please contact one of our team.

With the introduction of the Incorporated Societies Act 2022, every incorporated society must have a fair, transparent, and accessible process for dealing with disputes and complaints. This change is intended to help disputes to be resolved efficiently, while ensuring all parties are heard and treated fairly.

The below is a general guide on navigating a dispute under the Incorporated Societies Act 2022, please refer to your society’s constitution for further details, or get in touch for assistance.

When would an issue be called a ‘dispute’?

Disputes commonly arise between a society and its members, between members themselves, or between a member and an officer of the society where the matter relates to the affairs, rules, or decision-making of the society.

A dispute may concern:

an alleged breach of the constitution or policies;
unfair treatment of a member (for example, a member’s rights or interests have been damaged); or
conduct that is said to be inconsistent with the Act or the society’s governing documents.

Current and former members may bring complaints where the issue relates to their membership or prior involvement with the society.

How do I make a complaint?

If you have a complaint, you should read through and follow the process outlined in the society’s disputes policy. Usually this involves raising your complaint in writing and providing it to the society’s secretary or another officer nominated to receive complaints.

The complaint should clearly identify:

who is making it;
who it concerns;
the substance of the issue; and
sufficient detail so that the society can understand what has occurred and what outcome is sought.

Once the complaint has been received, the society should acknowledge the complaint within a reasonable timeframe and outline the steps that it will follow under its disputes process.

Investigating and determining a dispute

After the society receives a complaint, it must determine whether its disputes process should be engaged. If it does proceed, the committee may investigate and determine the matter itself or appoint an independent person or panel to do so. Whoever undertakes this role for the society must act impartially and without conflicts of interest.

The investigation should be proportionate to the nature of the dispute. This may involve seeking further information from the parties, reviewing relevant documents, and making reasonable inquiries to understand the facts.

When all relevant information is considered, the decision-maker must reach a determination. This must be fair, reasonable, and consistent with the Act and the society’s constitution. The outcome, together with reasons for the decision and any required actions, should be communicated to the parties in writing.

If I raise a complaint, what are my rights?

A person who makes a complaint must be given a reasonable opportunity to be heard before the dispute is determined. In most cases this will involve providing written submissions and supporting information. Where appropriate, the decision-maker may also allow the complainant to be heard orally.

What if I’m the subject of a complaint?

Any person who is the subject of a complaint is entitled to procedural fairness. They must be informed of the complaint and the allegations made against them in sufficient detail to enable a proper response.

Before any adverse decision is reached, you must be given a reasonable opportunity to present your position, provide explanations or evidence, and address the issues raised. No disciplinary or other adverse action should be taken unless this opportunity has been afforded.

If you are concerned that an issue may engage your society’s disputes resolution procedure, or if you would like to know more about what procedure your society should follow – get in touch with us.

When we talk about funding for charities and not-for-profits, many of us still default to the traditional model of donations, grants, and fundraising events. That approach can be powerful, but it is only part of the picture. A growing number of organisations are blending those familiar methods with a newer paradigm that treats their purpose as something to partner with and invest in, not simply to sponsor. By exploring tools such as impact investment, social enterprises, and income generating assets, it becomes possible to build more sustainable models that sit alongside, rather than replace, the old funding routes. Below are examples of some funding sources.

Under old paradigm: this is a continuation of an older charity mindset that asks people to donate to a cause and involves:

asking for donations from the public
running events, fundraisers, or dinners
seeking grants from local government
seeking funding from central government directly, if there is a relationship with a department
lottery grants or community organisation grants
apply for funding from privately endowed foundations (check their criteria)
Iwi-based organisations
approach community foundations (often a regional focus), energy trusts, or gaming trusts

Under new paradigm: seek partnership via impact investing and look for ways that a business element could be combined to ensure sustainability, such as charging for services or goods, or creating an asset of value. This is hard work but it is often a more long-term approach and can be done in combination with more traditional approaches. This could involve:

a start-up that creates an app to generate income, while also advancing purpose
a business that employs the people you want to help (for example, employing former prisoners)
providing an investment opportunity for property with housing or temporary accommodation, where income is also generated while the purpose fulfilled

For further information, an overview report with examples from the Centre for Social Impact is here.

After a year of uncertainty, and a consultation for charities earlier in the year, we now have an update on the issue of taxation of business income for charities.

As a reminder, there was a consultation paper put out on this topic at the start of the year by Inland Revenue (IRD). To read more on the philosophical position around why charities have tax concessions you can read the paper that our Partner, Steven Moe, wrote with Craig Fisher, which is available to download here.

In response to the consultation, around 900 submissions were received by the IRD – a very high level of feedback.

In May, it was announced no changes were due in the Budget on this topic, but we understood it was still being considered.

Now we have heard during a speech at an event hosted by the International Fiscal Association, Minister of Revenue Hon Simon Watts mentioned that he has decided not to continue work on the taxation of the business income of charities. We heard from the IRD that apparently, “Ministers were concerned the complexities, compliance costs and distortions associated with a change would impose significant costs on charitable organisations and distract them from their core purposes. However, he said he expects Inland Revenue to increase its enforcement efforts to make sure charity businesses are complying with the existing rules.”

Our view is that this is a positive development as it will provide certainty for charities on this position. There is still likely to be other points that are consulted on, which we will be involved in and will share updates on developments.

If you’d like to subscribe to our Impact email newsletter, which goes to more than 1,000, you can sign up here.

Published 6 November 2025.

One of the most important roles in an organisation is that of the CEO. They help to lead both internally and externally and have a focus on the implementation of the vision and mission.

But what happens when the role changes and there is a transition of CEOs? Here are a few ways to ensure a smooth transition and ensure that the new CEO can feel like they can begin a new era, without having to do things the way they have previously been done.

Staff communications: Ensure there is an announcement to all staff with both the current and future CEO to announce the transition, including rational, timeline, and expectations.
External communications: Consider how the news will be provided externally to customers, suppliers and others.
Meeting key people: It is a good idea to ensure that the old CEO introduces the new CEO to key people. For charities, it would be good to make sure that donors are informed about the change, as often the relationship is with the CEO.
Training for the new CEO: It might be worth asking the new CEO if they have any particular area they would like training in – some possible areas could be: governance, delegation skills, presentation skills, report preparation, EQ skills, or other topics.
Internal transition: Shadowing of roles could be helpful between the old CEO and the new CEO. It is also important to ensure that the CFO discusses how the finances work.
New beginnings: Having said that, it is important that the new CEO is not left with the legacy of the old CEO. In other words, a Board should be ready and allow them to start doing things their own way. As part of this, it could be important that the old CEO leaves completely and does not stay on. Otherwise, the new CEO cannot make their own way (sometimes with mistakes) and try different things.
Marketing: The changeover can be a good chance to refresh the marketing strategy and explaining of what the purpose of the organisation is.
Employment: Get a contract agreed at the start the process which is clear on expectations and responsibilities.
Performance review plan: Create a plan from the beginning on how reviews will happen and when, so there can be clear understanding from the start.

We help many organisations which have new CEOs and hope this list is of help to consider. A transition can be very positive and a good thing for the organisation.

In New Zealand, residents’ associations have been a common way of managing a common area of land around residents’ houses or units, or sometimes they are used as advocacy and community. In this article we focus on residents’ associations that own or manage property for the benefit of residents. Residents’ associations are often established as incorporated societies, existing for the benefit of their community of residents and to manage an area of common land or facilities.

Due to a change in the law, all incorporated societies in New Zealand will need to re-register to comply with the Incorporated Societies Act 2022. It’s important to note that if an incorporated society does not reregister by April 2026 then it will cease to exist.

When considering re-registration, residents’ associations should take into consideration:

If there is a common area used by residents, and who owns this property?
Who manages the insurance of the property?
Will the current area of the property be subject to change in the future?
Are there other obligations and parties we need to consult (i.e. councils, developers).

It’s important to note that if your residents association does own property, it needs to consider whether it would like to re-register – more information here.

If you would like assistance with your residents’ association, please get in touch.

In January 2026, new regulations provided a temporary exemption for Residents Associations under the Incorporated Societies Act 2022. You can read more about this here.

We support incorporated societies and regularly answer related queries. If you would like to discuss further, email incorporatedsocieties@parryfield.com and a member of our Parry Field Lawyers team will be in touch.

Can a trust, or its trustees collectively, be regarded as a “person” and therefore held directly accountable for breaches of Health and Safety law? In this article, we consider how a tragic accident in 2020 led to a court ruling on this issue, clarifying the liability of trustees under the Health and Safety at Work Act 2015 and highlighting the consequences for those managing unincorporated trusts.

On 17 September 2020, a tragic accident occurred where a child’s jacket was caught in machinery and the child was fatally injured. The farm where the accident occurred was owned by RH & Jury Trust (the Trust), an unincorporated trust. WorkSafe New Zealand charged the Trust with breaching the Health and Safety at Work Act 2015 (“HSWA”), as a “person conducting a business or undertaking” (“PCBU”) under sections 37(1), 48(1) and 48(2)(c).

The District Court ruled that the Trust nor the Trustees could be charged with the aforementioned breaches, and WorkSafe appealed this decision as a point of law to the High Court. The High Court had to determine whether a trust (or its trustees collectively) constitute a “person” under the HSWA.

While the Court determined that the Trust is not a “person” under section 16 of HSWA, it did determine that the trustees come within the definition of “person” as an unincorporated body of persons.

This decision now allows for the trustees themselves to be prosecuted collectively under the HSWA as a “person”. Crucially, because the trustees can now be considered “a body of persons”, the higher penalties under the HSWA become available – including the maximum fine of $1.5 million.

Implications:

Trustees cannot assume that the trust structure shields them from liability when it comes to Health and Safety.
Trustees of unincorporated trusts can be prosecuted collectively for breaches of the Health and Safety at Work Act 2015.
This opens the door for significant penalties, including the maximum fines under section 48(2)(c) of the Health and Safety at Work Act 2015, which are up to $1.5 million.
Regular risk assessments, policies, and documented compliance measures are essential to diminish the risk of liability.

We help many charities, Trusts, and other entities. If you have any questions on this topic or others, feel free to contact us and check out our free resources on our website.

For-purpose entities – such as charities, trusts, incorporated societies, and other not-for-profits – play a vital role in New Zealand’s social, cultural, and environmental fabric. Whether your entity is updating governance documents, reviewing its structure, or addressing a legal issue, engaging a lawyer can be an important step in ensuring compliance with the law and safeguarding the organisation’s mission and resources. To make the most of this investment, it helps to approach the process strategically. Here are some practical tips for for-purpose groups to consider before engaging legal advice.

1. Review What’s Working (and What’s Not)

Before engaging a lawyer, take time to review your existing documents – such as your trust deed, constitution, governance policies, or operational frameworks. Identify what is functioning well and where you are experiencing challenges. Are there clauses that no longer reflect the way your organisation operates? Are governance roles clearly defined? This internal review allows your lawyer to focus on areas that genuinely require attention, saving time and cost.

2. Engage Early, Not Late

Legal input is most effective when sought early – before you begin drafting changes or responding to a legal issue. Waiting too long may result in duplicated effort or the need to undo work that isn’t legally sound. A brief initial conversation can help your lawyer identify key priorities, assess risks, and ensure your proposed approach is on the right track from the outset.

3. Be Clear and Organised in Your Instructions

When engaging a lawyer, provide clear and detailed instructions. Outline your goals, the context behind any proposed changes, and any concerns you have. Include relevant background materials such as past minutes, correspondence, or current governance documents. The more context your lawyer has, the more efficiently they can provide targeted and useful advice.

4. Keep Focused on the Big Picture

Avoid getting bogged down in minor technicalities unless they materially affect your organisation. It’s important to prioritise the key challenges – such as legal compliance, governance structure, and decision-making authority – that can impact your ability to function effectively. For example, are your governance structures consistent with the Incorporated Societies Act 2022 and/or the Charities Act 2005, or other relevant legislation? Are you meeting your obligations under the Trusts Act 2019? Keeping your focus on strategic matters ensures your legal budget is used wisely. For more information on whether your entity is consistent with the relevant legislation, see our Information Hubs on our website here.

5. Value Quality Over Speed

It’s natural to want to minimise costs, but rushing legal work can lead to oversights that may prove costly down the line. Investing in quality legal advice can help prevent disputes, clarify responsibilities, and ensure your documents reflect both legal requirements and your organisation’s needs. In the long term, this can provide both peace of mind and financial savings by avoiding future legal issues.

Need legal help?

If your for-purpose entity requires guidance on governance, compliance, or restructuring, the team at Parry Field Lawyers can help. We work with a wide range of non-profit and charitable organisations to ensure their structures are robust, lawful, and fit for purpose. Reach out to us for more information.

This article is intended for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please contact a qualified legal professional. Reproduction is permitted with prior approval and credit to the source.

Background

What does the exemption mean for residents associations?

Time to consider an alternative structure?

When would an issue be called a ‘dispute’?

How do I make a complaint?

Investigating and determining a dispute

If I raise a complaint, what are my rights?

What if I’m the subject of a complaint?

Christchurch CBD

Christchurch – Riccarton

Rolleston

Hokitika

Auckland