How many of us have traveled for business and have wanted our partner to come for moral support and attendance at business events and dinners? Those of us from the non-profit sector who attend conferences have wondered about the deductibility of our companion’s travel expenses. It has always been a disputed issue in terms of the Income Tax Act 2007 as qualifying expenses. The entitlement of wives of business executives attending local and overseas conferences and seminars for the purpose of networking and information gathering was recently put to the test in two court cases.

The presiding judge considered a case where the wife was travelling with her executive husband on company business. The judge found that sufficient grounds would exist where the wife provided her husband with a reasonable amount of support in undertaking the business of the company he was representing, without being an expert in its affairs. The Commissioner of Inland Revenue has interpreted this as having some knowledge of the business, or some special skill or expertise, to provide this support in a material way. Simply being supportive is not enough to qualify as qualifying expenditure.

In the opinion of an NZARCT advisory trustee assisting the NZARCT this ruling has implications for non-profit executives. In this particular case, the test applied by the judge was the ability of the wife to recall names of contacts made at the conference, the exchange of business cards, and her having a wide knowledge of the goals and issues facing the organisation represented by her husband.

We therefore consider this to be an opportunity in presenting a valid case to the IRD to maintain parity with the for-profit sector.