1: Title
This Act is the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006.
2: Commencement
1: This Act comes into force on the date on which it receives the Royal assent, except as provided in this section.
2: Section 209
3: Section 201
4: Section 207(2)
5: Section 207(4)
6: Section 206
7: Section 218(1) (3) (4) (5)
8: Section 205
9: Sections 202 204 207(3)
10: Section 25(1) (2) (4) (5) (7)
11: Sections 6 12 13 16 17 20(1)(a) 27 31 40 58 59(1) 60 62 63 77(4) 78(1)(a) (3) (4)(a) (6) (7) 80(1)(c) (2) 82 85 88 94 96 129 138 139 140 141 152(1) (3) 155(3) (4) (10) (11) (17) (19)(a) (21) (22) (36) (45) 156 158(2)(a) 166 167 169(3) 170 171 172 179 183 218(2)
12: Sections 19 195
13: Sections 14 32 33 37 38 43 48 49 50 54 55 56 77(3) 86 87 90 91 92(1) (2) (4) (6) 95 102 147(1) (2) 148 155(2) (9) (33) 159 163
14: Sections 22 110 119 137 155(23) 161(2)
15: Sections 34 35 36 135 136 149 153 155(32) 157 177 186 187 208
16: Sections 29 39 44 45 46 92(3) (5) (7) 131(1)
17: Sections 117 132 151 155(24) 178
18: Section 11
19: Sections 191 216
20: Sections 5(1) (2) 8(2) (3) (4) (5) 24(1) 25(3) (6) (8) (9) 26(1) 61(1) 64(1) to (3) 65(1) to (3) 66(1) 67(1) (2) 68(1) 69(1) to (3) 70(1) 71(1) 72(1) 73(1) 74(1) to (3) 75(1) to (3) 76(1) to (3) 77(1) (2) (6) 78(1)(b) (2) (4)(b) (5) (8) 79(1) 80(1)(a) (b) (3) (4) (5) 81(1) (2) 83(1) 89(1) 93(1) (2) 99(1) 101(1) (2) 142 143 144 145(1) 155(5) (7) (13) (15) (16) (18) (19)(b) (29) (42) (44) (46) 160 162 181 189 193
21: Sections 145(2) to (6) 146 155(26) (27) 220 to 227
22: Sections 4 7 10 15 18 21 28 51 97 98 100 103(1) 112 113 114 115 116 118 120 121 122 123 124 125 126 127 128 131(2) 133 134 147(3) 150 152(2) 154 155(20) (25) (30) (35) (37) (39) (43) (47) 158(2)(b) 165 176 180 182 184 185 188 196 197 198 199 214 215 219 229 230 232 233 240 241 243 244 246 247
1: Amendments to
Income Tax Act 2004
3: Income Tax Act 2004 This Part amends the Income Tax Act 2004
4: New section CB 4B inserted
After section CB 4
CB 4B: Disposals of certain shares by portfolio investment entity after declaration of dividend
When this section applies
1: This section applies to a portfolio investment entity who disposes of a share in a company if—
a: section CX 44C
b: a dividend from the share is—
i: declared before the disposal; and
ii: paid to a holder of the share who after the disposal becomes entitled to the dividend. Assessable income
2: The portfolio investment entity is treated as deriving an amount of income equal to—
a: the amount of the dividend that is not fully imputed as that term is defined in section NG 2(3)
b: the amount of the dividend, if paragraph (a) amount company dividend double tax agreement income non-participating redeemable share portfolio investment entity resident in New Zealand share. 2007-10-01 Section CB 4B
5: Foreign investment fund income
1: In section CD 26(b) comparative value method or the deemed rate of return method comparative value method, the deemed rate of return method, the cost method, or the fair dividend rate method
2: In section CD 26 cost method fair dividend rate method
3: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
6: Meaning of share
In the heading to section CE 6 : when share acquired
7: New subpart CP inserted
Before subpart CQ
CP: Income from portfolio investment entities
CP 1: Portfolio investor allocated income
The amount of portfolio investor allocated income of a person who is an investor in a portfolio tax rate entity is income of the person in the income year that includes the portfolio allocation period for which the person is allocated the amount under section HL 24 amount income investor portfolio allocation period portfolio investor allocated income portfolio tax rate entity. 2007-10-01 Subpart CP
8: When FIF income arises
1: In section CQ 5(1)(c)
a: in subparagraph (ii) (Grey list exemption) (Exemptions: direct income interests in FIF in grey list country)
b: after subparagraph (ii)
iib: the exemptions limited by income years in section EX 33B
iic: the exemption for shares in a listed Australian company in section EX 33C
iid: the exemption for units in certain Australian unit trusts in section EX 33D
iie: the Australian superannuation fund exemption in section EX 33E .
2: Section CQ 5(1)(d)
d: if the person is a natural person and not acting as a trustee, the person holds, at any time during the income year when the person is a New Zealand resident, attributing interests in FIFs for which the total of the following amounts is more than $50,000:
i: if subparagraph (ii) section EX 56
ii: if the person acquired the interest before 1 January 2000 and chooses, for the year or an earlier year, that this subparagraph and section DN 6(1)(d)(ii)
db: if the person is acting as a trustee of a trust that meets the requirements of subsection (5)
i: if subparagraph (ii) section EX 56
ii: if the person acquired the interest before 1 January 2000 and chooses, for the year or an earlier year, that this subparagraph and section DN 6(1)(d)(ii) .
3: Section CQ 5(1)(f)
f: under the relevant calculation method chosen by the person, an income amount is calculated for the year under sections EX 38 to EX 45B
4: After section CQ 5(4) When application of subsection (1) affected by subsection (1)(db)
5: Subsection (1)(db)
a: the settlor of the trust—
i: is a relative or legal guardian of a beneficiary of the trust, or a person associated with a relative or legal guardian of a beneficiary of the trust under section OD 7
ii: is required by a court order to pay damages or compensation to the beneficiary:
b: the settlor of the trust—
i: is the estate of a deceased person; and
ii: is required by a court order to settle on the trust the proceeds of damages or compensation for the beneficiaries of the trust:
c: the settlor of the trust is the Accident Compensation Corporation:
d: the trust is of the estate of a deceased person and the income year begins on or before the day that is 5 years after the person's death.
5: In section CQ 5 associated person relative
6: Subsection (1)
7: Subsections (2) (3) (4)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007,-if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
9: Withdrawals
1: In section CS 1(2) withdrawn withdrawal
2: Subsection (1)
10: Dividend derived by company from overseas
1: Section CW 9(1)
1: A dividend from a foreign company is exempt income if derived by a company that is—
a: resident in New Zealand; and
b: not a portfolio tax rate entity. 2007-10-01 Section CW 9(1)
2: In section CW 9 portfolio tax rate entity 2007-10-01 Section CW 9
11: Income for military service in operational area
Section CW 19
CW 19: Income for military or police service in operational area
When this section applies
1: This section applies if a member of the New Zealand Defence Force or the police (the member Exempt income
2: The following amounts are exempt income of the member:
a: an amount of operational allowance:
b: an amount exempted by a decision of the ministerial committee under subsection (3) Ministerial committee
3: A ministerial committee that includes the Prime Minister, the Minister of Defence, the Minister of Police, the Minister of Finance, and the Minister of Foreign Affairs may, for the purposes of subsection (2)(b) Some definitions
4: In this section,— operational allowance
a: is paid directly and solely for being in an operational area; and
b: is not—
i: a regular force gratuity:
ii: a bonus or bounty for re-engagement in a regular force operational area
a: to which the Minister of Defence has ordered the deployment of New Zealand Defence Force members for a specific mission authorised by the Government; and
b: that the Chief of Defence Force delineates for that mission. amount exempt income income New Zealand operational allowance operational area .
12: New section CW 23B inserted
1: After section CW 23
CW 23B: Reinvested amount from foreign superannuation scheme in Australia
An amount of income derived in an income year by a natural person as a withdrawal from a foreign superannuation scheme is exempt income if—
a: the person in the income year invests the amount in another foreign superannuation scheme; and
b: each foreign superannuation scheme is constituted in Australia and is—
i: an Australian approved deposit fund:
ii: an Australian exempt public sector superannuation scheme:
iii: an Australian regulated superannuation fund:
iv: an Australian retirement savings account. Australian approved deposit fund Australian exempt public sector superannuation scheme Australian regulated superannuation fund Australian retirement savings account exempt income foreign superannuation scheme income income year .
2: Subsection (1)
13: Charities: business income
1: In section CW 35(8)(b)(v) Income Dividend
2: Subsection (1)
14: Refund from environmental restoration account
1: In section CX 43B , or after earlier payment or request for refund
2: Subsection (1)
15: New heading and sections CX 44C and CX 44D inserted
After section CX 44B Portfolio investment entities
CX 44C: Proceeds from disposal of certain shares by portfolio investment entities
When this section applies
1: This section applies to income derived by a portfolio investment entity from the disposal of a share if—
a: the share is issued by a company resident in New Zealand and not treated under a double tax agreement as not being resident in New Zealand or by a company—
i: resident in Australia and not treated under a double tax agreement between Australia and another country as being resident in a country other than Australia or New Zealand; and
ii: included in an index that is an approved index under the ASX Market Rules, made under Chapter 7 of the Corporations Act 2001 (Aust)
iii: required under the Income Tax Assessment Act 1997 (Aust) and Income Tax Assessment Act 1936 (Aust)
b: the share is not a non-participating redeemable share. Excluded income
2: The income is excluded income of the portfolio investment entity. amount arrangement company dividend double tax agreement excluded income income non-participating redeemable share portfolio investment entity resident resident in Australia resident in New Zealand share
CX 44D: Portfolio investor allocated income and distributions of income by portfolio tax rate entities
Portfolio investor allocated income
1: Portfolio investor allocated income derived under section CP 1
a: the prescribed investor rate for the investor is more than 0%; and
b: the investor does not, before the last day of the income year, provide to the portfolio investment entity a portfolio investor rate for the income year that is less than the prescribed investor rate for the income year; and
c: for a portfolio tax rate entity making payments of tax under section HL 21 Distribution of income by portfolio tax rate entity
2: An amount of income derived by an investor as a distribution by a portfolio tax rate entity is excluded income of the investor. Distribution by portfolio investment entity that is not portfolio tax rate entity
3: An amount of income derived in an income year by an investor as a distribution by a portfolio listed company is—
a: excluded income of the investor, if the investor is a resident who—
i: is not a zero-rated portfolio investor; and
ii: does not include the distribution as income in a return of income for the income year:
b: excluded income of the investor to the extent that the amount of the distribution is not fully imputed, as that term is defined in section NG 2(3) paragraph (a) amount distribution excluded income income income year investor New Zealand resident portfolio investment entity portfolio investor allocated income portfolio investor exit period portfolio investor rate portfolio listed company portfolio tax rate entity prescribed investor rate return of income zero-rated portfolio investor . 2007-10-01 Section CX 44C Section CX 44D
16: New section CZ 20 added
1: After section CZ 19
CZ 20: Geothermal wells between 31 March 2003 and 17 May 2006
When this section applies
1: This section applies to a person's geothermal well, if—
a: the well is—
i: both started and completed between 31 March 2003 and 17 May 2006:
ii: acquired between 31 March 2003 and 17 May 2006; and
b: the person—
i: uses the well, or has the well available for use, after the end of the well's geothermal energy proving period, in deriving assessable income or carrying on a business for the purpose of deriving assessable income:
ii: disposes of the well. Income
2: The person has, for the first income year in which this section applies, income equal to,—
a: if subsection (l)(b)(i) section DZ 7 of the Income Tax Act 1994 section DZ 15
b: if subsection (1)(b)(ii)
i: the amount derived from disposing of the well; and
ii: the total amount of deductions that the person is allowed for the well under section DZ 7 of the Income Tax Act 1994 section DZ 15 amount business deduction dispose geothermal energy proving period geothermal well income income year .
2: Subsection (1)
17: Base price adjustment under old financial arrangements rules
1: In section DB 9B Link with subpart DA
2: This section supplements the general permission and overrides all the general limitations.
2: In section DB 9B amount, deduction, general limitation, general permission, supplement
3: Subsections (1) (2)
18: Cost of revenue account property
1: Section DB 17(1) (2) When this section applies
1: This section applies if a person incurs expenditure as a cost of revenue account property. Deduction
2: The person is allowed a deduction for the expenditure. Exclusion for portfolio investment entities
3: Subsection (2)
a: the person is a portfolio investment entity; and
b: section CX 44C Link with subpart DA
4: The link between this section and subpart DA (General rules) is—
a: subsection (2)
b: subsection (3)
c: the other general limitations still apply. 2007-10-01 Section DB 17(1) Section DB 17(2) Section DB 17(3) Section DB 17(3)
2: In section DB 17 portfolio investment entity 2007-10-01 Section DB 17
19: Patent applications or patent rights acquired on or after 1 April 1993
1: Section DB 31(4)(a) (b)
a: total cost section DZ 14
b: total amounts of depreciation loss
2: Subsection (1)
20: Bribes paid to public officials
1: In section DB 36
a: the heading to subsection (1) When this section applies
b: in subsection (1)(b) New Zealand
c: subsections (3) (4) Exclusions
3: This section does not apply if—
a: the bribe is given outside New Zealand and, at the time it is given by person A, the bribe is not an offence under the laws of the foreign country in which is situated the principal office of the person, organisation or other body by whom the foreign public official is employed or for whom they provide services:
b: the bribe is paid wholly or mainly to ensure or expedite the performance by a foreign public official of a routine government action when the value of the benefit is small.
2: Subsection (1)
21: New heading and section DB 43B inserted
After section DB 43 Portfolio investment entities
DB 43B: Zero-rated portfolio investor and portfolio investor allocated loss
Deduction
1: A zero-rated investor has a deduction for an income year for the amount of portfolio investor allocated loss under subpart HL (Portfolio investment entities) for the income year. Amount of deduction reduced
2: The amount of a deduction allowed to an investor under subsection (1)
a: the amount of the deduction:
b: the amount of the portfolio entity formation loss allocated to the investor for the income year that has not previously reduced—
i: a credit, under section HL 27(8)
ii: a rebate, under section KI 1(3)
iii: a deduction, under this subsection. deduction investor portfolio investment entity portfolio investor allocated loss zero-rated portfolio investor . 2007-10-01 Section DB 43B
22: Section DB 45 replaced
1: Section DB 45
DB 45: Expenditure incurred in operating motor vehicle under agreement or arrangement affected by section CX 6B
Deduction
1: A party to an agreement or arrangement referred to in section CX 6B Link with subpart DA
2: This section overrides the private limitation and exempt income limitation. The general permission must still be satisfied and the other general limitations still apply. arrangement deduction depreciation loss exempt income limitation FBT rules general limitation general permission lease loss motor vehicle .
2: Subsection (1)
23: Deductions for business use
1: In section DE 2(4)(a) paragraph (b) paragraph (b) or (c)
2: Section DE 2(4)(b)
b: using the formula in subsection (7)
c: using the formula in subsection (8C)
3: After section DE 2(6) When subsection (7) applies
6B: Subsection (7)
a: the depreciation loss results from a calculation made for the motor vehicle under section EE 41(2)
b: the motor vehicle was, at any time during the period the person owned it, dealt with in subsection (5)
4: After section DE 2(8) When subsection (8C) applies
8B: Subsection (8C)
a: the depreciation loss results from a calculation made for the motor vehicle under section EE 41(2)
b: the motor vehicle starts to have a business use in the same income year as the year in which the depreciation loss arose. Calculation of deduction: depreciation loss on disposal in certain circumstances
8C: The formula referred to in subsection (4)(c) disposal depreciation loss × business proportion. Definition of items in formula
8D: In the formula,—
a: disposal depreciation loss section EE 41(2)
b: business proportion sections DE 3 to DE 12
5: Subsections (1) to (4)
24: Foreign investment fund loss
1: Section DN 5(1) Deduction
1: A person is allowed a deduction for a FIF loss. Ring fencing rule for loss under branch equivalent method
1B: The deduction for a FIF loss calculated under the branch equivalent method is subject to the jurisdictional ring-fencing rule in section DN 9
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
25: When FIF loss arises
1: In section DN 6(1)(a)(ii) non-resident: non-resident; and
2: In section DN 6(1)(b) FIFs): FIFs); and
3: In section DN 6(1)(c)
a: in subparagraph (ii) (Grey list exemption) (Exemptions: direct income interests in FIF in grey list country)
b: after subparagraph (ii)
iib: the exemptions limited by income years in section EX 33B
iic: the exemption for shares in a listed Australian company in section EX 33C
iid: the exemption for units in certain Australian unit trusts in section EX 33D
iie: the Australian superannuation fund exemption in section EX 33E .
4: In section DN 6(1)(c)(vi) exemption): exemption); and
5: In section DN 6(1)(d) $50,000: $50,000; and
6: Section DN 6(1)(d) subsection (5)
d: if the person is a natural person and not acting as a trustee, the person holds, at any time during the income year when the person is a New Zealand resident, attributing interests in FIFs for which the total of the following amounts is more than $50,000:
i: if subparagraph (ii) section EX 56
ii: if the person acquired the interest before 1 January 2000 and chooses, for the year or an earlier year, that this subparagraph and section CQ 5(1)(d)(ii)
db: if the person is acting as a trustee of a trust that meets the requirements of subsection (4)
i: if subparagraph (ii) section EX 56
ii: if the person acquired the interest before 1 January 2000 and chooses, for the year or an earlier year, that this subparagraph and section CQ 5(1)(d)(ii) .
7: In section DN 6(1)(e) time: time; and
8: In section DN 6(1)(f) EX 45 EX 45B
9: After section DN 6(3) When application of subsection (1) affected by subsection (1)(db)
4: Subsection (1)(db)
a: the settlor of the trust—
i: is a relative or legal guardian of a beneficiary of the trust, or a person associated with a relative or legal guardian of a beneficiary of the trust under section OD 7
ii: is required by a court order to pay damages or compensation to the beneficiary:
b: the settlor of the trust—
i: is the estate of a deceased person; and
ii: is required by a court order to settle on the trust the proceeds of damages or compensation for the beneficiaries of the trust:
c: the settlor of the trust is the Accident Compensation Corporation:
d: the trust is of the estate of a deceased person and the income year begins on or before the day that is 5 years after the person's death.
10: Subsections (6) (8) (9)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIR by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
26: Ring-fencing cap on deduction: not branch equivalent method
1: Section DN 8
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
27: New sections DZ 14 to DZ 17 added
1: After section DZ 13
DZ 14: Patent applications before 1 April 2005
When this section applies
1: This section applies if—
a: a patent is granted to a person in their 2005–06 or later income year; and
b: the patent is granted in relation to a patent application owned by the person; and
c: the patent application, with a complete specification, was first lodged with the Intellectual Property Office of New Zealand or a similar office in another jurisdiction before 1 April 2005; and
d: a deduction for expenditure on the patent application is not allowed under another provision. Calculation of deduction
2: The person is allowed, in the income year in which the patent is granted, a deduction for expenditure on the patent application in any income year, calculated using the formula— Definition of items in formula
3: In the formula,—
a: cost
b: months of ownership Link with subpart DA
4: This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. capital limitation deduction general limitation general permission income year
DZ 15: Geothermal wells between 31 March 2003 and 17 May 2006
When this section applies
1: This section applies to a person's geothermal well, if—
a: the well's geothermal energy proving period ends between 31 March 2003 and 17 May 2006; and
b: the well is—
i: both started and completed between 31 March 2003 and 17 May 2006:
ii: acquired between 31 March 2003 and 17 May 2006; and
c: a deduction for expenditure on the well is not allowed under any provision except this one. Deduction
2: The person is allowed, in the income year in which the well's geothermal energy proving period ends, a deduction for expenditure incurred on the well. Link with subpart DA
3: This section supplements the general permission and overrides the capital limitation. The other general limitations still apply. capital limitation deduction general limitation general permission geothermal energy proving period geothermal well income year supplement
DZ 16: Expenditure on improvements to aquacultural business before 1995-96 income year
When this section applies
1: This section applies to a person and an income year and expenditure—
a: incurred before the 1995-96 income year in making an improvement for the purposes of an aquacultural business; and
b: for which the person would be allowed under section DO 6 Deduction
2: The person is allowed a deduction in the income year for the expenditure. Amount of deduction
3: The amount of the deduction is calculated using the formula— 125% x schedule percentage × diminished value. Definition of items in formula
4: In the formula,—
a: schedule percentage schedule 7
b: diminished value Link with subpart DA
5: This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. amount business capital limitation deduction diminished value general limitation general permission income year
DZ 17: Expenditure on improvements to forestry land before 1995-96 income year
When this section applies
1: This section applies to a person and an income year and expenditure—
a: incurred before the 1995-96 income year in making an improvement on land; and
b: for which the person would be allowed under section DP 3 Deduction
2: The person is allowed a deduction in the income year for the expenditure. Amount of deduction
3: The amount of the deduction is calculated using the formula— 125% x schedule percentage × diminished value. Definition of items in formula
4: In the formula,—
a: schedule percentage schedule 7
b: diminished value Link with subpart DA
5: This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. amount business capital limitation deduction diminished value general limitation general permission income year .
2: Subsection (1)
28: Meaning of trading stock
After section EB 2(3)(d)
db: an excepted financial arrangement held by a person if section CX 44C . 2007-10-01 Section EB 2(3)(db)
29: What is depreciable property?
1: In section EE 6(1) Subsections (2) and (3) Subsections (2) to (4)
2: After section EE 6(3) Property: geothermal wells
4: For the purposes of this subpart, a person who owns a geothermal well is, for the geothermal energy proving period, treated as acquiring the well as property that declines in value and is to be available for use in carrying on a business for the purpose of deriving assessable income.
3: In section EE 6 geothermal energy proving period geothermal well
4: Subsections (1) to (3)
30: Calculation rule: income year in which item disposed of
1: After section EE 11(5) Exclusion: recent acquisition of item partly used for business
6: A person has the amount of depreciation loss calculated under section FB 7(9)
2: Subsection (1)
31: Depreciation methods
1: Section EE 12(1) Meaning of depreciation method
1: Depreciation method
a: a method that a person may use to calculate an amount of depreciation loss:
b: a rate determined by the Commissioner under section 91AAF or 91AAG of the Tax Administration Act 1994
c: a maximum pooling value determined by the Commissioner under section 91AAL
2: Subsection (1)
32: Amount resulting from standard calculation
1: Section EE 16(4)(b)
b: when the person uses the straight-line method,—
i: if subparagraph (ii) cost sections EE 18 and EE 19
ii: if the item is a patent or plant variety rights and the person has been allowed a deduction for depreciation loss for the patent application or plant variety rights application relating to the item, the item's adjusted tax value at the start of the month in which the person acquires the item (a variation to cost section EE 19
2: In section EE 16(5)(b) (or whole calendar months in the case of a patent application) part calendar months
3: In section EE 16(6) (or whole months in the case of a patent application) part months
4: Subsection (1)
5: Subsections (2) (3)
33: New section EE 24B inserted
After section EE 24
EE 24B: Depreciation loss for plant variety rights application upon grant of rights in 2005–06 or later income year
When this section applies
1: This section applies if—
a: plant variety rights are granted to a person in their 2005–06 or later income year; and
b: the plant variety rights are granted in relation to a plant variety rights application owned by the person; and
c: a deduction for expenditure is not allowed under another provision. Calculation of deduction
2: A person is allowed a deduction for the income year in which the plant variety rights are granted, for expenditure on the plant variety rights application, calculated using the formula— Definition of items in formula
3: In the formula,—
a: cost
b: months of ownership
c: depreciation months paragraph (b) amount deduction depreciation income year plant variety rights .
34: Setting of economic depreciation rate
1: Section EE 25(3) Relationship with subject matter: election under section EE 26B
3: Subsection (1)(a), (c), and (d) section EE 26B
2: Subsection (1)
35: Economic rate for certain aircraft and motor vehicles
1: After section EE 25D(2)(c)
cb: is not used for top-dressing or spraying; and .
2: In section EE 25D(3) having seats for no more than 12 persons that is designed exclusively or mainly to carry persons, and has seats for no more than 12 persons,
3: Subsections (1) (2)
36: Economic rate for plant, equipment, or building, with high residual value
1: Section EE 25E(1)
1: This section is about setting the economic depreciation rate that applies to items of a kind of depreciable property if—
a: the kind of depreciable property is not fixed life intangible property, or excluded depreciable property, for which an economic rate cannot be set; and
b: the estimated residual market value for the item is more than 13.5%; and
c: the items are—
i: plant or equipment acquired on or after 1 April 2005:
ii: buildings acquired on or after 19 May 2005.
2: Subsection (1)
37: Annual rate for fixed life intangible property
1: Section EE 27(1)(b)
b: a patent for which a rate is set in section EE 27B
2: Section EE 27(1)(c)
3: Subsection (1)
38: Sections EE 27B to EE 27E replaced
Sections EE 27B to EE 27E
EE 27B: Annual rate for patent granted in 2005–06 or later income year
When this section applies
1: This section applies to an item that is a patent, if the patent is acquired by a person in their 2005–06 or later income year. Rate
2: The rate is calculated using the formula— Definition of item in formula
3: In the formula, legal life
a: the patent's remaining legal life from the start of the income year in which the person incurs the additional costs referred to in that section, if section EE 19
b: the patent's remaining legal life from the time at which the person acquires the patent, if—
i: section EE 19
ii: the person has not been allowed a deduction for depreciation loss for the patent application relating to the patent; or
c: the remaining legal life of the patent application relating to the patent from the start of the income year in which the person acquires the patent application, if—
i: section EE 19
ii: the person has been allowed a deduction for depreciation loss for the patent application; and
iii: section EE 19
d: the remaining legal life of the patent application relating to the patent from the start of the income year in which the person acquires the patent, if—
i: section BE 19
ii: the person has been allowed a deduction for depreciation loss for the patent application; and
iii: section EE 19 How rate expressed
4: The rate calculated using the formula is expressed as a decimal and rounded to 2 decimal places, with numbers at the midpoint or greater being rounded up and other numbers being rounded down. acquire deduction depreciation loss income year legal life .
39: Items no longer used
1: Section EE 32(1)(a)
a: is no longer used or, because the geothermal energy proving period has ended, becomes unavailable for use under section EE 6(4) .
2: In section EE 37 geothermal energy proving period
3: Subsections (1) (2)
40: Heading before section EE 33, section EE 33, and section EE 34 replaced
1: The heading before section EE 33 EE 33 EE 34 Transfers of depreciable property: associated persons and non-qualifying amalgamations
EE 33: Transfer of depreciable property on or after 24 September 1997
When this section applies
1: This section applies when, on or after 24 September 1997, a person ( person A subsection (2) Associated person
2: The associated person must be a person to whom 1 of the following paragraphs applies:
a: the associated person is allowed a deduction for an amount of depreciation loss for the item for the income year in which person A acquires it:
b: the associated person would have been allowed a deduction for an amount of depreciation loss for the item for the income year in which person A acquired it, if section EE 11(1)
c: the associated person was allowed a deduction for an amount of depreciation loss for the item for the income year before the income year in which person A acquired it:
d: the associated person has been allowed a deduction for the item under section DZ 9
e: the associated person has been allowed a deduction for the item under section DZ 9
f: the associated person would have been allowed a deduction for an amount of depreciation loss for the item for the income year in which person A acquired it, if the associated person had incurred a cost for the item for which the person was denied any other deduction and if section EE 11(1)
g: the associated person would have been allowed a deduction for an amount of depreciation loss for the item for the income year before the income year in which person A acquired it, if the associated person had incurred a cost for the item for which the person was denied any other deduction:
h: the associated person would have been allowed a deduction for the item under section DZ 9
i: the associated person would have been allowed a deduction for the item under section DZ 9
j: the associated person would have been a person to whom any of paragraphs (a) to (i) section EE 8 Cost of item to person A
3: For the purpose of determining the amount of depreciation loss that person A has, the cost of the item to person A is treated as 1 of the following:
a: if section EE 49
i: the cost of the item to person A:
ii: the item's market value when, after the associated person acquired it, a person was first allowed a deduction for it; or
b: if section EE 49
i: the cost of the item to person A:
ii: the cost of the item to the associated person. Exclusions
4: Subsection (3)
a: if—
i: the item is not depreciable intangible property; and
ii: the Commissioner decides that it is appropriate to use the cost of the item to person A for the purposes of determining the amount of depreciation loss that person A has for the item:
b: if the cost to person A is income of the associated person, other than under section EE 41(1)
c: if person A acquires the item under a relationship agreement or a matrimonial agreement to which section FF 16 Rate
5: The annual rate that person A applies to the item must be 1 of the following (not including an item of fixed life intangible property, for which the rate is set in section EE 27
a: if person A uses the same depreciation method for the item as that used by the associated person for it, the annual rate that person A applies to it must not be more than the annual rate that the associated person applied to it:
b: if person A uses a depreciation method for the item different from the method that the associated person used for it, the annual rate that person A applies to it must not be more than a rate equivalent to the rate that the associated person applied to it, as determined by schedule 10 Relationship with section EE 34 and subpart FI
6: This section—
a: is overridden by section EE 34
b: does not apply to a bequest of property, if it is property to which subpart FI (Effect of certain disposals and resulting acquisitions) applies and the property is disposed of at market value. acquire amount annual rate assessable income associated person business Commissioner deduction depreciable intangible property depreciation loss depreciation method fixed life intangible property income income year matrimonial agreement property relationship agreement 1994 No 164 s EG 17(1)–(5), (8)
EE 34: Transfer of depreciable property in non-qualifying amalgamation on or after 14 May 2002
When this section applies
1: This section applies when, on or after 14 May 2002, an amalgamated company acquires, directly or indirectly, an item of property from an amalgamating company, and—
a: the amalgamated company's acquiring of the item is part of an amalgamation that is not a qualifying amalgamation; and
b: the amalgamating company is an associated person of the amalgamated company, treating the amalgamating company as existing at the time that the amalgamated company is treated under section FE 5(1)(b)
c: 1 of the paragraphs in section EE 33(2) Cost of item to person
2: For the purposes of determining the amount of depreciation loss that the amalgamated company has, the cost of the item to it is treated as 1 of the following:
a: if section EE 49
i: the value given by section FE 5
ii: the item's market value when, after the amalgamating company acquired it, a person was first allowed a deduction for it; or
b: if section EE 49
i: the value given by section FE 5
ii: the cost of the item to the amalgamating company. Exclusions
3: Subsection (2)
a: if—
i: the item is not depreciable intangible property; and
ii: the Commissioner decides that it is appropriate to use the cost of the item to the amalgamated company for the purposes of determining the amount of depreciation loss that it has for the item; or
b: if the cost to the amalgamated company is income of the amalgamating company, other than under section EE 41(1) Rate
4: The annual rate that the amalgamated company applies to the item must be 1 of the following (not including an item of fixed life intangible property, for which the rate is set in section EE 27
a: if the amalgamated company uses the same depreciation method for the item as that used by the amalgamating company for it, the annual rate that the amalgamated company applies to it must not be more than the annual rate that the amalgamating company applied to it; or
b: if the amalgamated company uses a depreciation method for the item different from the method that the amalgamating company used for it, the annual rate that the amalgamated company applies to it must not be more than a rate equivalent to the rate that the amalgamating company applied to it, as determined by schedule 10 acquire amalgamated company amalgamating company amalgamation amount annual rate assessable income business Commissioner depreciable intangible property depreciation loss depreciation method fixed life intangible property income matrimonial agreement property qualifying amalgamation relationship agreement 1994 No 164 ss EG 17(3B), FE 5(2) .
2: Subsection (1)
41: Transfer of depreciable property on or after 24 September 1997
1: Section EE 33(3)(a)(ii), as inserted by section 40
ii: the item's market value when the associated person starts to use it, or to have it available for use, for the purpose of deriving assessable income or carrying on a business for the purpose of deriving assessable income; or .
2: Subsection (1)
42: Transfer of depreciable property in non-qualifying amalgamation on or after 14 May 2002
1: Section EE 34(2)(a)(ii), as inserted by section 40
ii: the item's market value when the amalgamating company starts to use it, or to have it available for use, for the purpose of deriving assessable income or carrying on a business for the purpose of deriving assessable income; or .
2: Subsection (1)
43: Application of sections EE 41 to EE 44
1: Section EE 37(2) Exclusion
2: Sections EE 41 to EE 44
a: when a person disposes of an item of intangible property as part of an arrangement to replace it with an item of the same kind:
b: when a person's patent application has concluded because a patent is granted to the person in relation to the patent application:
c: when a person's geothermal well becomes unavailable for use under section EE 6(4)
2: In section EE 37 geothermal energy proving period geothermal well
3: Subsection (1)
4: Subsections (1) (2)
44: Consideration for purposes of section EE 37
1: After section EE 38(6) Unused geothermal well brought into use
6B: The consideration that a person derives from the event described in section EE 40(5B) section EE 32(4)
2: Subsection (1)
45: Events for purposes of section EE 37
1: After section EE 40(5) Unused geothermal well brought into use
5B: The fifth event is, for a person's geothermal well that is unavailable for use under section EE 6(4)
a: using the well in deriving assessable income or carrying on a business for the purposes of deriving assessable income:
b: having the well available for use in deriving assessable income or carrying on a business for the purposes of deriving assessable income.
2: In section EE 40(6) fifth sixth
3: In section EE 40 assessable income business geothermal energy proving period geothermal well
4: Subsections (1) to (3)
46: New section EE 44B
1: After section EE 44
EE 44B: Unused geothermal well brought into use
When this section applies
1: This section applies to a person when an event occurs to which section EE 40(5B) Person treated as acquiring geothermal well
2: The person is treated as having acquired the geothermal well, on the day the event occurs, for the cost of the well under this subpart before the event occurs. geothermal well .
2: Subsection (1)
47: Base value in section EE 47 when no previous deduction
1: Section EE 49(2) Base value
2: Base value
2: Subsection (1)
48: Total deductions in section EE 47
1: In section EE 51(1)(b) subsection (3) subsection (3)
c: the amount of a deduction under section EE 24B
2: Section EE 51(3)(a)
a: the person was allowed for the item and for,—
i: if the item is a patent, the patent application in relation to which the item was granted:
ii: if the item is a geothermal well that a person acquired under section EE 44B(2) .
3: Section EE 51(5)(a) to (d)
a: for an item to which section EE 48
i: unless subparagraph (ii) or (iii)
ii: if the item is a geothermal well that a person acquired under section EE 44B(2) section EE 6(4)
iii: if the item is a patent and the person acquired the patent application in relation to which the patent was granted, the date on which the person acquired the patent application; or
b: for an item to which section EE 49
i: unless subparagraph (ii)
ii: if the item is a patent and the person acquired the patent application in relation to which the item was granted, the start of the month in which the person acquired the patent application; or
c: for an item to which section EE 50
d: for an item to which section EZ 21(1) section EE 47
4: In section EE 51 geothermal well
5: Subsections (1) to (3)
6: Subsections (1) to (4)
49: Meaning of annual rate
Section EE 52(4C) to (4E)
50: Other definitions
1: In section EE 58, the definition of legal life legal life
a: for an item to which paragraphs (b) and (c)
b: for an item that is a patent application or a patent, means the legal life under paragraph (a)
c: for an item that is plant variety rights, means the total of—
i: the legal life that the rights would have under paragraph (a)
ii: the number of whole calendar months during which the person owns the plant variety rights application in relation to which the rights are granted .
2: Subsection (1)
a: a patent application, if the patent application, with a complete specification, is first lodged with the Intellectual Property Office of New Zealand or a similar office in another jurisdiction on or after 1 April 2005:
b: a patent, if the patent is acquired by a person in their 2005–06 or later income year:
c: plant variety rights, if the plant variety rights are granted to a person in their 2005–06 or later income year.
51: New section EG 3 inserted
After section EG 2
EG 3: Allocation of income and deductions by portfolio tax rate entity
When this section applies
1: This section applies for the calculation of a portfolio tax rate entity's liability for income tax for a tax year. Allocation shown in accounts
2: Income and deductions of the portfolio tax rate entity are allocated—
a: to portfolio allocation periods as—
i: reflected in the entity's valuations of portfolio investor interests, if the entity makes such valuations; or
ii: shown in the entity's financial statements, if subparagraph (i)
b: to portfolio investor classes and investors as—
i: reflected in the entity's valuations of portfolio investor interests, if the entity makes such valuations; or
ii: shown in the entity's financial statements, if subparagraph (i) deduction income income tax investor portfolio allocation period portfolio investor class portfolio tax rate entity tax year . 2007-10-01 Section EG 3
52: New section EI 3B inserted
1: After section EI 3
EI 3B: Spreading income from patent rights
When this section applies
1: This section applies when a person derives income under section CB 26 Timing of income
2: The person may allocate the income equally between the income year in which they derive it and the following 2 income years. Commissioner income income year patent rights .
2: Subsection (1)
53: Allocation of deductions for research, development, and resulting market development
1: Section EJ 21(3) Minimum amount of deduction allocated to income year
3: The person must not allocate to an income year (the current year subsection (1)
a: the amount of assessable income referred to in subsection (2)(a)
b: the amount of the deductions that have not been allocated to income years before the current year. Maximum amount of deduction allocated to income year
4: The person must not allocate to an income year (the current year subsection (1)
a: the amount of assessable income referred to in subsection (2)(a)
b: the amount of the deductions that—
i: arise in other income years from which a net loss may be carried forward under Part 1 to the current year; and
ii: have not been allocated to income years before the current year.
2: Subsection (1)
54: Interest on payments to environmental restoration account
1: In section EK 6(1)(b) section EK 15 or EK 19 section EK 15, EK 16, or EK 19
2: Subsection (1)
55: Refund
1: Section EK 12(8)
8: If a person is entitled to a refund under subsection (2)(b)
a: the amount in the person's environmental restoration account, after any transfer under section EK 15, EK 16, or EK 19
b: the person's maximum account balance for the income year.
2: Subsection (1)
56: Transfer on death, bankruptcy, or liquidation
1: Section EK 16(3) Commissioner to make transfer
3: The Commissioner must transfer the amount referred to in subsection (4)
2: After section EK 16(5) Transfer to person treated as payment to account by person
5B: A transfer to the environmental account of a person under subsection (3)
3: Subsection (2)
57: Environmental restoration account of member of consolidated group
1: Section EK 20(2)
2: The nominated company for the consolidated group may act on behalf of the member under this subpart to—
a: make payments, applications, and transfers:
b: receive refunds and transfers.
2: Subsection (1)
58: Consideration for agreement for sale and purchase of property or services, hire purchase agreement, specified lease, or finance lease
In section EW 32(1) property and services property or services
59: Associates and 10% threshold
1: In section EX 15(1) section EX 46(1)(a) sections EX 32(b) and EX 46(1)(a)
2: Subsection (1)
60: Unqualified grey list CFCs
1: In section EX 22(2) CQ 2(g) CQ 2(1)(g)
2: Subsection (1)
61: Section EX 33 replaced
1: Section EX 33
EX 33: Exemptions: direct income interests in FIF in grey list country
Direct income interest of 10% or more
1: A person's rights in a FIF in an income year are not an attributing interest if, at all times in the year,—
a: the rights are a direct income interest of 10% or more; and
b: the person is not a portfolio investment entity, a superannuation scheme, a unit trust, a life insurer, or a group investment fund; and
c: the FIF is not an entity described in schedule 4, part B
d: the FIF meets the requirements of subsection (2) Further requirements under subsection (1)
2: A FIF meets the requirements of this subsection if—
a: the FIF is a grey list company and a country listed in the grey list imposes on the FIF liability for income tax on the FIF's income because the FIF—
i: is domiciled in the country:
ii: is resident in the country:
iii: is incorporated in the country:
iv: has its place of management in the country:
b: there is a country listed in the grey list that—
i: is the country under whose laws the FIF is organised; and
ii: imposes on persons holding income interests in the FIF liability for income tax on the FIF's income; and
iii: under the laws of the country, is the source of 80% or more of the income of the FIF. Shares acquired when FIF resident and unlisted company
3: A person's rights in a 1-111 in an income year are not an attributing interest if—
a: the rights are shares; and
b: the FIF is a grey list company that is not an entity described in schedule 4
c: the person acquired the shares when—
i: the company was resident in New Zealand; and
ii: the shares were not listed on a recognised exchange; and
d: the company became a grey list company immediately after having, for 12 months or more,—
i: been resident in New Zealand; and
ii: had in New Zealand more than 50% of its assets and employees; and
e: the year begins less than 10 years after the company became a grey list company; and
f: at all times in the year, the company has a fixed establishment in New Zealand; and
g: the company through the fixed establishment—
i: incurs in the year expenditure, other than interest, of $1,000,000:
ii: at all times in the year, engages 10 or more fulltime employees or contractors. Shares acquired when FIF unlisted, FIF owns resident company
4: A person's rights in a FIF in an income year are not an attributing interest if—
a: the rights are shares; and
b: the FIF is a grey list company that is not an entity described in schedule 4
c: the person acquired the shares when the shares were not listed on a recognised exchange; and
d: at all times in the year, the grey list company directly or indirectly owns a company (the resident company
i: been resident in New Zealand; and
ii: had in New Zealand more than 50% of the resident company's assets and employees; and
e: the year begins less than 10 years after the grey list company first owned the resident company; and
f: the resident company through a fixed establishment in New Zealand—
i: incurs in the year expenditure, other than interest, of $1,000,000:
ii: at all times in the year, engages 10 or more fulltime employees or contractors. Shares acquired under share purchase agreement
5: A person's rights in a FIF in an income year are not an attributing interest if—
a: the person is a natural person; and
b: the rights are shares; and
c: the FIF is a grey list company that is not an entity described in schedule 4
d: at the time the person acquires the shares, the FIF—
i: employs the person:
ii: owns, directly or indirectly, the person's employer; and
e: the person acquires the shares under a share purchase agreement; and
f: the share purchase agreement includes a restriction on the disposal of the shares that affects the value under section CE 3
g: at the beginning of the year, the period of the restriction has not expired or has expired for a period of less than 6 months. Exception: Categories 2 and 3
6: Subsections (1) to (5) section EX 30(3) or (4) attributing interest company direct income interest employee employer FIF fixed establishment grey list company group investment fund income tax income year interest life insurer New Zealand resident portfolio investment entity recognised exchange resident share share purchase agreement superannuation scheme unit trust year
EX 33B: Exemptions limited by income years: shares in certain grey list companies
Exemption for shares in company meeting requirements for listing, shareholding and taxation
1: A person's rights in a FIF are not an attributing interest in an income year beginning before 1 April 2012 if the rights are shares in a grey list company that,—
a: on 17 May 2006,—
i: is not an entity described in schedule 4
ii: is listed on a recognised exchange in New Zealand; and
iii: has more than 20 000 shareholders who have addresses in New Zealand on the company's share register in New Zealand; and
iv: has shareholders referred to in subparagraph (iii)
v: is listed on a recognised exchange in a country listed in the grey list; and
vi: is liable to income tax in a country listed in the grey list; and
vii: has assets of which more than 50% in total value are shares in other companies carrying voting interests of more than 50%; and
b: in the period of 30 days beginning from the day on which the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 receives the Royal assent, gives to the Commissioner notice that on 17 May 2006 the grey list company met the requirements in paragraph (a)(i) to (vii) Exemption for shares in company meeting requirements for investment
2: A person's rights in a FIF are not an attributing interest in an income year beginning before 1 April 2009 if the rights are shares in a grey list company that,—
a: on 17 May 2006,—
i: is not an entity described in schedule 4
ii: is listed on a recognised exchange in New Zealand; and
iii: has shareholders of which more than 40% have addresses in New Zealand on the company's share register in New Zealand; and
iv: is listed on a recognised exchange in a country listed in the grey list; and
v: is liable to income tax in a country listed in the grey list; and
vi: has assets of which 50% or more in total value are shares in other companies each of which is resident in New Zealand; and
vii: has assets of which 90% or more in total value are shares in other companies each of which is resident in Australia or New Zealand and is listed on a recognised exchange in Australia or New Zealand; and
b: in the period of 30 days beginning from the day on which the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 receives the Royal assent, gives to the Commissioner notice that on 17 May 2006 the grey list company met the requirements in paragraph (a)(i) to (vii)
c: at all times in the year,—
i: has assets of which 50% or more in total value are shares in other companies each of which is resident in New Zealand; and
ii: has assets of which 90% or more in total value are shares in other companies each of which is resident in Australia or New Zealand and is listed on a recognised exchange in Australia or New Zealand. Exception: Election in tax return that exemption not apply
3: An exemption under subsection (1) or (2) initial year attributing interest company FIF grey list grey list company income income tax income year New Zealand resident recognised exchange resident resident in Australia share shareholder voting interest year
EX 33C: Exemption: shares in listed Australian company
A person's rights in a FIF in an income year are not an attributing interest if the rights are from shares and the FIF is a company that, at all times in the year, is—
a: resident in Australia and not treated under a double tax agreement between Australia and another country as being resident in a country other than Australia or New Zealand; and
b: included in an index that is an approved index under the ASX Market Rules, made under Chapter 7 of the Corporations Act 2001 (Aust)
c: not an entity described in schedule 4, part B
d: required under the Income Tax Assessment Act 1997 (Aust) Income Tax Assessment Act 1936 (Aust) attributing interest company direct income interest double tax agreement FIF income income tax income year resident in Australia share year
EX 33D: Exemption: units in certain Australian unit trusts
Exemption
1: A person's rights in a FIF in an income year are not an attributing interest if—
a: the FIF is a unit trust; and
b: the FIF is not an entity described in schedule 4, part B
c: at all times in the year, the unit trust is resident in Australia; and
d: at all times in the year, there is an RWT proxy under section NF 2AA
e: for the assets of the unit trust that each have a market value greater than or equal to the cost of the asset for the unit trust, the market value of the assets (the held assets asset disposals subsection (2) Requirements for unit trust's assets and disposals
2: The total market value of the held assets must exceed the total cost of the held assets by an amount that is less than or equal to 3 times the amount calculated using the formula— disposal proceeds − asset costs. Definition of items in formula
3: In the formula,—
a: disposal proceeds
b: asset costs Currency of amounts in subsections (2) and (3)
4: In subsections (2) and (3) attributing interest company FIF income income year New Zealand resident resident in Australia RWT proxy share unit trust year .
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
62: New section EX 33E inserted
1: Before section EX 34
EX 33E: Australian superannuation fund exemption
A person's rights in a FIF are not an attributing interest if—
a: the person is a natural person; and
b: the FIF is a foreign superannuation scheme that is—
i: an Australian approved deposit fund:
ii: an Australian exempt public sector superannuation scheme:
iii: an Australian regulated superannuation fund:
iv: an Australian retirement savings account. attributing interest Australian approved deposit fund Australian exempt public sector superannuation scheme Australian regulated superannuation fund Australian retirement savings account 1114 foreign superannuation scheme .
2: Subsection (1)
63: New resident's accrued superannuation entitlement exemption
1: In section EX 36(1) in a FIF to the extent to which the requirements in subsections (2) to (9) in a FIF—
a: to the extent to which the requirements in subsections (2) to (4)
b: if the requirements in subsections (5) to (9)
2: Subsection (1)
64: Four calculation methods
1: The heading for section EX 38 Six calculation methods
2: In section EX 38(1)(d) method. method; or
e: the fair dividend rate method; or
f: the cost method.
3: In section EX 38(2) EX 40B, EX 40,
4: In section EX 38 cost method fair dividend rate method
5: Subsections (1) (2) (4)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date: or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
65: Limits on choice of calculation methods
1: After section EX 40(4)(b)
bb: the person is required by section EX 40B .
2: After section EX 40(4) Deemed rate of return method: further limit
5: A person may not use the deemed rate of return method to calculate FIF income or loss for an income year from an attributing interest if—
a: the interest is a direct income interest in a foreign company of less than 10%; and
b: the person is not required by section EX 40B Comparative value method
6: A person may use the comparative value method to calculate FIF income or loss for an income year from an attributing interest that is a share in a foreign company only if—
a: the person's direct income interest in the FIF, increased for the purposes of this paragraph by each direct income interest of a person associated with the person, is 10% or more at any time in the income year:
b: the attributing interest is a right of a type referred to in subsection (8)(a)(i) to (v)
c: the person is a natural person:
d: the person is the trustee of a trust that—
i: is a qualifying trust; and
ii: is established mainly for the benefit of a natural person for whom the settlor has natural love or affection or mainly for the benefit of an organisation or trust with income that is exempt income under section CW 34
iii: has no settlor who is not a natural person; and
iv: is not a superannuation scheme. Fair dividend rate method for share in foreign company
7: A person may use the fair dividend rate method to calculate FIF income or loss for an income year from an attributing interest that is a share in a foreign company only if the requirements of subsection (8)
a: the person is a portfolio investment entity, an entity eligible to be a portfolio investment entity, or a life insurance company and the FIF is a foreign investment vehicle:
b: the person's direct income interest in the FIF, increased for the purposes of this paragraph by each direct income interest of a person associated with the person, is less than 10%—
i: at any time in the income year, if the FIF is a grey list company; or
ii: at all times in the income year, if the FIF is not a grey list company. Fair dividend rate method: further requirements for share in foreign company
8: The further requirements under this subsection for a share in a foreign company are—
a: the attributing interest is none of the following:
i: a fixed rate share under section LF 2(3)
ii: a non-participating redeemable share:
iii: an interest in a non-resident having assets of which 80% by value consist of financial arrangements denominated in New Zealand dollars:
iv: an interest meeting the requirements of subsection (9) section 91AAOof the Tax Administration Act 1994
v: an interest of a type that the Commissioner has deter mined under section 91AAOof the Tax Administration Act 1994
b: the person uses the comparative value method for no other attributing interest that is a share in a foreign company and for which the person would be allowed, in the absence of this paragraph, to use the fair dividend rate method. Fair dividend rate method: other interests for which method not applicable
9: To meet the requirements of this subsection, an attributing interest of a person (the investor
a: of another person to provide to the investor an amount exceeding the issue price of the share; and
b: that is direct to the investor or indirect through an arrangement; and
c: that is non-contingent or subject to a contingency that is sufficiently remote to be immaterial. Cost method for share in foreign company
10: A person may use the cost method to calculate FIF income for an income year from an attributing interest that is a share in a foreign company only if—
a: the person's direct income interest in the FIF, increased for the purposes of this paragraph by each direct income interest of a person associated with the person, is less than 10%—
i: at any time in the income year, if the FIF is a grey list company; or
ii: at all times in the income year, if the FIF is not a grey list company; and
b: use of the fair dividend rate method is allowed but is not practical because the person cannot determine the market value of the attributing interest at the start of the income year except by an independent valuation.
3: In section EX 40 cost method direct income interest exempt income fair dividend rate method income qualifying trust superannuation scheme trustee
4: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
66: New section EX 40B inserted
1: After section EX 40
EX 40B: Use of particular calculation methods required
A person who is not allowed to use the fair dividend rate method to calculate FIF income from an attributing interest in a FIF for an income year but would be allowed to use the method in the absence of section EX 40(8)(a)
a: the comparative value method; or
b: the deemed rate of return method, if use of the comparative value method is not practical because the person cannot determine the market value of the attributing interest at the start of the income year. attributing interest comparative value method deemed rate of return method fair dividend rate method FIF FIF income income year .
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
67: Default calculation method
1: In section EX 41(1)(b) , EX 40B, EX 40
2: Section EX 41(2) Default choice for direct income interests in FIF of less than 10%
2: The person is treated as having chosen to use, for the period,—
a: for a direct income interest in a foreign company of less than 10% for which section EX 40(7)
i: the fair dividend rate method, if it is practical to use that method; or
ii: the cost method, if it is not practical to use the fair dividend rate method; or
b: for any other interest,—
i: the accounting profits method, if section EX 40(2)
ii: the comparative value method, if section EX 40(2)
iii: the deemed rate of return method, if section EX 40(2)
3: In section EX 41 cost method fair dividend rate method
4: Subsections (2) (3)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
68: Accounting profits method
1: In section EX 42(7) paragraph (a) The person must choose, for the accounting period and each later accounting period and for all interests for which the person uses the accounting profits method,—
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
69: Comparative value method
1: After section EX 44(6) Application of method to direct income interests of less than 10%
6B: Subsection (6C) subsection (1)
a: that is a direct income interest in a foreign company of less than 10% at a time in the relevant income year; and
b: that is not a right of a type referred to in section EX 40(8)(a)(i) to (v) Reduction of total FIF loss from direct income interests of less than 10%
6C: If, in the absence of this subsection, the person would have under subsection (1)
2: Section EX 44(7) Conversion of foreign currency amounts
7: If an amount in a foreign currency is the market value of, or is derived from or incurred on, an interest during an income year, the person must choose that for the income year and each later income year and for all interests for which the person uses the comparative value method—
a: each foreign currency amount in the income year be converted into New Zealand dollars using the exchange rate on the day for which the market value is determined or on which the amount is derived or incurred; or
b: all foreign currency amounts in the income year be converted into New Zealand dollars at the average of the close of trading spot exchange rates for the 15th day of each month that falls in the income year.
3: In section EX 44 direct income interest FIF loss
4: Subsections (1) (2) (3)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIF's by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
70: New sections EX 44B to EX 44E inserted
1: After section EX 44
EX 44B: Fair dividend rate method
Alternative formulas used
1: If a person is using the fair dividend rate method unit valuer
a: makes investments for the benefit of other persons (the investors
b: assigns each investor an interest in a proportion of the net returns from the investments; and
c: determines the value of the investor's interest for each of a number of periods (the unit valuation periods FIF income for person not unit valuer
2: For a person who is not a unit valuer, the FIF income for an income year from the attributing interests in FIFs for which the person uses the fair dividend rate method is the amount calculated for the income year using the method in section EX 44C FIF income for unit valuer
3: For a person who is a unit valuer, the FIF income for an income year from the attributing interests in FIFs for which the person uses the fair dividend rate method is the total of the amounts calculated for each unit valuation period in the income year using the method in section EX 44D FIF loss
4: If a person is using the fair dividend rate method to calculate FIF income or loss from an attributing interest in a FIF, the FIF loss from the attributing interest for an income year is zero. amount attributing interest fair dividend rate method FIF FIF income FIF loss income year investor loss unit trust
EX 44C: Fair dividend rate method: usual method
FIF income
1: If this section applies to a person who calculates FIF income from attributing interests in FIFs under the fair dividend rate method for an income year, the FIF income is the total of the amounts, each calculated for a FIF for the income year using the formula in subsection (2) Formula
2: The formula referred to in subsection (1) 0.05 x opening + quick sale adjustment. Definition of items in formula
3: The items in the formula are defined in subsections (4) and (5) Opening
4: Opening
a: for which the person uses the fair dividend rate method; and
b: that the person holds at the beginning of the income year. Quick sale adjustment
5: Quick sale adjustment is—
a: zero, if the person in the income year—
i: acquires or increases the attributing interest in no FIF for consideration:
ii: disposes of or reduces the attributing interest in no FIF after an acquisition or increase of the interest for consideration; or
b: if paragraph (a)
i: the amount (the peak holding adjustment subsection (6)
ii: the amount (the quick sale gains Peak holding adjustment
6: The peak holding adjustment is the total for the income year of the amounts calculated for each FIF using the formula in subsection (7) Formula
7: The formula referred to in subsection (6) 0.05 × quick sales × average cost. Definition of items in formula
8: The items in the formula are defined in subsections (9) and (10) Quick sales
9: Quick sales
a: if the person in the income year does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a) interest size
i: the difference between the interest size that is the greatest for the income year and the interest size at the beginning of the income year:
ii: the difference between the interest size that is the greatest for the income year and the interest size at the end of the income year; or
c: if paragraph (a) section EX 44E Average cost
10: Average cost
a: if the person in the income year does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a)
c: if paragraph (a) section EX 44E Conversion of foreign currency amounts
11: If an amount in a foreign currency is the market value of, or is incurred on, an interest during an income year, the person must choose that for the income year and each later income year and for all interests for which the person uses the fair dividend rate method—
a: each foreign currency amount in the income year be converted into New Zealand dollars using the exchange rate on the day for which the market value is determined or on which the amount is incurred; or
b: all foreign currency amounts in the income year be converted into New Zealand dollars at the average of the close of trading spot exchange rates for the 15th day of each month that falls in the income year. Identifying attributing interests disposed of in income year
12: For the purpose of calculating the quick sale gains under subsection (5)(b)(ii) amount attributing interest fair dividend rate method FIF FIF income income year investor market value share reorganisation
EX 44D: Fair dividend rate method: method for entities that value investors' units
FIF income
1: If this section applies to an entity who calculates FIF income from attributing interests in FIFs under the fair dividend rate method, the FIF income of the entity from the interests is the total of the amounts calculated using the formula in subsection (2) for each of the periods making up the income year (the unit valuation periods Formula
2: The formula for the entity is— Definition of items in formula
3: The items in the formula are defined in subsections (4) to (7) Opening
4: Opening
a: for which the entity uses the fair dividend rate method; and
b: that the entity holds at the beginning of the unit valuation period. Period
5: Period Year
6: Year Quick sale adjustment
7: Quick sale adjustment
a: zero, if the unit valuation period is 1 day; or
b: zero, if the entity in the unit valuation period—
i: acquires or increases the attributing interest in no FIF for consideration:
ii: disposes of or reduces the attributing interest in no FIF after an acquisition or increase of the interest for consideration; or
c: if paragraphs (a) and (b)
i: the amount (the peak holding adjustment subsection (8)
ii: the amount (the quick sale gains Peak holding adjustment
8: The peak holding adjustment is the total for the unit valuation period of the amounts calculated for each FIF using the formula in subsection (9) Formula
9: The formula referred to in subsection (8) 0.05 x quick sales × average cost. Definition of items in formula
10: The items in the formula are defined in subsections (11) and (12) Quick sales
11: Quick sales
a: if the entity in the unit valuation period does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a) interest size
i: the difference between the interest size that is the greatest for the unit valuation period and the interest size at the beginning of the unit valuation period:
ii: the difference between the interest size that is the greatest for the unit valuation period and the interest size at the end of the unit valuation period; or
c: if paragraph (a) section EX 44E Average cost
12: Average cost
a: if the entity in the unit valuation period does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a)
c: if paragraph (a) section EX 44E Conversion of foreign currency amounts
13: If an amount in a foreign currency is the market value of, or is incurred on, an interest during an income year, the entity must choose that for the income year and each later income year and for all interests for which the entity uses the fair dividend rate method—
a: each foreign currency amount in the income year be converted into New Zealand dollars using the exchange rate on the day for which the market value is determined or on which the amount is incurred; or
b: all foreign currency amounts in the income year be converted into New Zealand dollars at the average of the close of trading spot exchange rates for the 15th day of each month that falls in the income year. Identifying attributing interests disposed of in income year
14: For the purpose of calculating the quick sale gains under subsection (7)(c)(ii) amount attributing interest close of trading spot exchange rate fair dividend rate method FIF FIF income income year market value
EX 44E: Fair dividend rate method and cost method: calculating items in formulas for periods affected by share reorganisations
Items and formulas
1: This section provides for the calculation, for an income year or unit valuation period (the affected period
a: the item quick sales sections EX 44C(7), EX 44D(9), and EX 45B(2)
b: the item average cost sections EX 44C(7), EX 44D(9), and EX 45B(2) and (7)(b)
c: the item change section EX 45B(7)(b) Treatment of affected period in which share reorganisation occurs
2: For the purposes of calculating the items for an affected period under this section,—
a: the affected period is treated as consisting of periods (the reorganisation periods
b: each reorganisation period in the affected period—
i: begins with the beginning of the affected period or a share reorganisation in the affected period; and
ii: ends before the next later event that is a share reorganisation or the end of the affected period:
c: the amount of the attributing interest in the FIF held by the person at any time (the comparison time equivalent interest size
d: the amount of an acquisition or increase (the acquired interest equivalent acquired interest
i: the equivalent interest size for the time of the acquisition or increase; and
ii: the amount that would be the equivalent interest size for the time of the acquisition or increase if the person were not to have the acquired interest. Quick sales
3: Under this section, the item quick sales
a: the difference between the equivalent interest size that is the greatest for the affected period and the equivalent interest size for the beginning of the affected period:
b: the difference between the equivalent interest size that is the greatest for the affected period and the equivalent interest size for the end of the affected period. Average cost
4: Under this section, the item average cost Change
5: Under this section, the item change Conversion of foreign currency amounts
6: If an amount in a foreign currency is incurred on an interest during an affected period, the person must use the method for converting the amount to New Zealand currency chosen under section EX 44C, EX 44D, or EX 45B amount attributing interest FIF income year
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
71: Deemed rate of return method
1: In section EX 45(15) paragraph (a) If an amount is derived from, or incurred on, the interest in a foreign currency during the income year, the person must choose, for the year and each later year and for all interests for which the person uses the deemed rate of return method,—
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
72: New section EX 45B inserted
1: Before section EX 46
EX 45B: Cost method
FIF income from interest, disposal of interest
1: If a person is using the cost method
a: the FIF income from that interest for the relevant income year is the greater of zero and the amount calculated using the formula in subsection (2)
b: the FIF loss from that interest for the relevant income year is zero. Formula
2: The formula referred to in subsection (1) 0.05 × (opening value + (quick sales × average cost)). Definition of items in formula
3: The items in the formula are defined in subsections (4) to (6) Opening value
4: Opening value
a: zero, if the relevant income year is the year in which the person acquires the interest; or
b: the amount of an independent valuation of the market value of the interest at the beginning of the relevant income year, if the person holds the interest at the beginning of the relevant income year and—
i: the interest was not an attributing interest for the income year before the relevant income year:
ii: the person has used the cost method for the interest for a period of 4 or more income years ending before the relevant income year and has not applied this paragraph to the interest for any of those income years; or
c: the amount calculated using the formula in subsection (7)(a) current opening interest preceding opening interest
d: the amount calculated using the formula in subsection (7)(b)
e: the amount calculated using the formula in subsection (7)(c) Quick sales
5: Quick sales
a: if the person in the relevant income year does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a) interest size
i: the difference between the interest size that is the greatest for the income year and the interest size at the beginning of the income year:
ii: the difference between the interest size that is the greatest for the income year and the interest size at the end of the income year; or
c: if paragraph (a) section EX 44C Average cost
6: Average cost
a: if the person in the relevant income year does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a)
c: if paragraph (a) section EX 44C Formulas for opening value
7: In subsection (4)
a: the first formula is— preceding + FIF income:
b: the second formula is— preceding + FIF income + (change x average cost):
c: the third formula is— Definition of items in formulas
8: The items in the formulas are defined in subsections (9) to (14) Preceding
9: Preceding FIF income
10: FIF income subsection (1) Change
11: Change
a: if no share reorganisation occurs in the income year before the relevant income year, the difference between the person's attributing interest at the beginning of the relevant income year and the person's attributing interest at the beginning of the income year before the relevant income year:
b: if a share reorganisation occurs in the income year before the relevant income year, the amount calculated under section EX 44C Average cost
12: Average cost
a: if the person in the income year before the relevant income year does not acquire or increase the attributing interest in the FIF for consideration or does not dispose of or reduce the attributing interest in the FIF after such an acquisition or increase, zero; or
b: if paragraph (a)
c: if paragraph (a) section EX 44C Opening interest
13: Opening interest Preceding interest
14: Preceding interest Conversion of foreign currency amounts
15: If an amount in a foreign currency is the market value of, or is incurred on, an interest during an income year, the person must choose that for the income year and each later income year and for all interests for which the person uses the cost method—
a: each foreign currency amount in the income year be converted into New Zealand dollars using the exchange rate on the day for which the market value is determined or on which the amount is incurred; or
b: all foreign currency amounts in the income year be converted into New Zealand dollars at the average of the close of trading spot exchange rates for the 15th day of each month that falls in the income year. amount calculation method close of trading spot exchange rate dividend FIF FIF income foreign withholding tax income year loss New Zealand tax .
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
73: Additional FIF income or loss if CFC owns FIF
1: Section EX 46(4)(c)
c: apply the FIF loss ring-fencing rules in section DN 9
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
74: Codes: comparative value and deemed rate methods
1: The heading to section EX 47 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method
2: Section EX 47(1)
1: This section applies if a person holding an attributing interest in a FIF calculates the FIF income or loss from the interest for a period using—
a: the comparative value method:
b: the deemed rate of return method:
c: the fair dividend rate method:
d: the cost method.
3: In section EX 47 cost method fair dividend rate method
4: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
75: Limits on changes of method
1: In section EX 50(2) paragraph (e)
f: in the case of the fair dividend rate method, it is impossible to find out the start-of-year market value of the interest except by an independent valuation:
g: in the case of the cost method, if it was the default method under section EX 41
2: After section EX 50(7) Repeated changes between fair dividend rate method and comparative value method
8: A person may change more than once from the fair dividend rate method to the comparative value method and from the comparative value method to the fair dividend rate method if the person is a natural person or the trustee of a trust that—
a: is a qualifying trust; and
b: is established mainly for the benefit of—
i: a natural person for whom the settlor has natural love or affection:
ii: an organisation or trust with income that is exempt income under section CW 34
c: has no settlor who is not a natural person; and
d: is not a superannuation scheme.
3: In section EX 50 cost method exempt income fair dividend rate method qualifying trust settlor superannuation scheme trustee
4: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
76: Consequences of changes in method
1: In section EX 51(1) (a) (b)
a: from 1 of the 4 cost-based calculation methods (the comparative value method, or the deemed rate of return method, or the fair dividend rate method, or the cost method) to either of the look-through calculation methods (the accounting profits method or the branch equivalent method):
b: from either of the look-through calculation methods to 1 of the 4 rust-based calculation methods.
2: Section EX 51(3) (4) Changes from comparative value method or fair dividend rate method to cost method or deemed rate of return method
3: If a person holding an attributing interest in a FIF changes from either of the comparative value method and the fair dividend rate method to either of the cost method and the deemed rate of return method for calculating the FIF income or loss from the interest, the person is treated as having—
a: disposed of the interest to an unrelated person immediately before the start of the first income year to which the new method applies; and
b: reacquired the interest immediately after the start of the income year; and
c: received for the disposal and paid for the reacquisition an amount equal to the market value of the interest at the time of the disposal. Changes from cost method or deemed rate of return method to comparative value method or fair dividend rate method
4: If a person holding an attributing interest in a FIF changes from either of the cost method and the deemed rate of return method to either of the comparative value method and the fair dividend rate method for calculating the FIF income or loss from the interest, the person is treated as having—
a: disposed of the interest to an unrelated person immediately before the start of the first income year to which the new method applies; and
b: reacquired the interest immediately after the start of the income year; and
c: received for the disposal and paid for the reacquisition an amount equal to,—
i: if the person changes from the cost method, what would have been the interest's opening value under section EX 45B
ii: if the person changes from the deemed rate of return method, the interest's closing book value under section EX 45(7)
3: In section EX 51 cost method fair dividend rate method
4: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph b); or
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
77: Migration of persons holding FIF interests
1: Section EX 52(1)(c)
c: for the period before the change of residence, calculates FIF income or loss from the interest using—
i: the comparative value method:
ii: the deemed rate of return method:
iii: the fair dividend rate method:
iv: the cost method.
2: Section EX 52(3)(c)
c: for the period after the change of residence or status, calculates FIF income or loss from the interest using—
i: the comparative value method:
ii: the deemed rate of return method:
iii: the fair dividend rate method:
iv: the cost method.
3: In section EX 52(4)
a: in paragraph (a) residence residence or status
b: in paragraph (b) when not resident in New Zealand when the person is a transitional resident or not a New Zealand resident
4: In section EX 52(5)(c) deemed rate of return method branch equivalent method
5: In section EX 52 branch equivalent method
6: In section EX 52 cost method fair dividend rate method
7: Subsections (3) (4) (5)
8: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
78: Changes in application of FIF exemptions
1: In section EX 53(1)
a: Subsections (2) and (3) Subsections (2) to (4)
b: in paragraph (b)(ii)
i: or (db) CQ 5(1)(d)
ii: or (db) DN 6(1)(d)
2: In section EX 53(2) paragraph (a) the comparative value method or deemed rate of return method the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method
3: In section EX 53(3) deemed rate of return method branch equivalent method
4: In section EX 53(5)
a: Subsections (2) to (4) Subsections (6) to (8)
b: in paragraph (b)(ii)
i: or (db) CQ 5(1)(d)
ii: or (db) DN 6(1)(d)
5: In section EX 53(6) paragraph (a) the comparative value method or the deemed rate of return method the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method
6: In section EX 53(6)(b) repurchased reacquired
7: In section EX 53(7) deemed rate of return method branch equivalent method
8: In section EX 53 branch equivalent method cost method fair dividend rate method
9: Subsections (1)(a) (3) (4)(a) (6) (7)
10: Subsections (1)(b) (2) (4)(b) (5)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
79: New section EX 54B inserted
1: After section EX 54
EX 54B: FIF rules first applying to interest for income year beginning on or after 1 April 2007
Application of this section
1: This section applies if—
a: a person has rights in a FIF—
i: on the day (the preceding day
ii: on the day (the application day
b: for the period ending on the preceding day,—
i: the rights are not an attributing interest:
ii: the rights are an attributing interest for which the person does not have FIF income or loss; and
c: for the period beginning on the application day, the rights are an attributing interest for which the person has FIF income or loss. Disposal and acquisition
2: The person is treated as having—
a: disposed of the interest to an unrelated person immediately before the application day; and
b: reacquired the interest at the start of the application day; and
c: received for the disposal and paid for the reacquisition an amount equal to the market value of the interest at the time of the disposal. Payment of tax liability arising from transition
3: A person who is liable to pay an amount of income tax (the tax amount subsection (2)
a: may satisfy the liability by making payments to the Commissioner of at least—
i: one third of the tax amount, in the income year following the income year in which the disposal is treated as occurring; and
ii: one half of the balance of the tax amount remaining owing after the payments made under subparagraph (i)
iii: the balance of the tax amount remaining owing after the payments made under subparagraphs (i) and (ii)
b: is not liable to pay any penalty or interest for which the entity would otherwise be liable for an inaccuracy in an estimate, or shortfall in the payment, of provisional tax to the extent that the inaccuracy or shortfall arises because of the disposal. attributing interest FIF FIF income income year loss portfolio calculation period revenue account property .
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
80: Measurement of cost
1: In section EX 56(1)(a)
a: or (db) CQ 5(1)(d)
b: or (db) DN 6(1)(d)
c: arises); and arises):
2: In section EX 56(1)(b) method; and method:
3: In section EX 56(1) paragraph (c)
d: the fair dividend rate method:
e: the cost method.
4: Section EX 56(2) Cost flow using average cost
2: The cost of an attributing interest in a FIF acquired by a person in an income year is treated as being the amount calculated using the formula— Definition of items in formula
2B: In the formula,—
a: total cost
b: number of interests paragraph (a)
5: In section EX 56 cost method fair dividend rate method
6: Subsections (1)(c) (2)
7: Subsections (1)(a) (b) (3) (4)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
81: Non-market transactions in FIF interests
1: In section EX 59 the comparative value method or the deemed rate of return method the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method
2: In section EX 59 cost method fair dividend rate method
3: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
82: Meaning of life insurance
1: Section EY 8(3)(b)
b: all the benefits referred to in paragraph (a)
i: payable if the death is caused by a specified cause named in the policy; or
ii: payable incidentally to the provision of accident or medical benefits, if the death is caused by a specified cause named in the policy.
2: Subsection (1)
a: takes a tax position in a return for an income year provided to the Commissioner before 16 May 2006 that relies on the law that would apply if subsection (1)
b: fails to choose, in a notice of proposed adjustment or a response notice, to apply subsection (1)
3: If subsection (1) subsection (2) subsection (1)
83: Section EZ 7 repealed
1: Section EZ 7
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
84: Depreciation: partial income-producing use
1: After section FB 7(7)
8: Subsection (9)
a: a person has an amount of depreciation loss for an item of depreciable property arising under section EE 41(2)
b: in the income year in which the depreciation loss arises, the person starts to use the item, or to have it available for use, for the purpose of deriving assessable income or carrying on a business for the purpose of deriving assessable income; and
c: at a time during the income year, the item is partly used, or is partly available for use, by the person—
i: in deriving assessable income or carrying on a business for the purpose of deriving assessable income; or
ii: in a way that is subject to fringe benefit tax; and
d: the item is not a motor vehicle to which subpart DE applies.
9: The deduction the person has for the amount of depreciation loss is calculated using the formula—
10: In the formula,—
a: disposal depreciation loss section EE 41(2)
b: qualifying use days subsection (8)(c)(i) or (ii)
c: all days
11: Despite subsection (8)
2: Subsection (1)
85: Amounts derived by non-residents from renting films
1: After section FC 21(3)
3B: If the non-resident person is required under an agreement with another non-resident ( person A subsection (1)
2: Section FC 21(4)
4: This section does not apply if the amounts derived by the nonresident person from activities described in subsection (1)
3: Subsection (1)
86: General requirements for being transitional resident
1: In section FC 23(a) has a permanent place of abode is resident
2: Section FC 23(b)
b: for a continuous period (the non-residence period section OE 1(1) or (2)
i: did not satisfy the requirements of section OE 1(1) or (2)
ii: was not resident in New Zealand; and. .
3: In section FC 23(c) period. period; and
d: the person has not ceased to be a transitional resident after the end of the non-residence period.
4: Subsections (1) to (3)
87: Section FC 24 replaced
1: Section FC 24
FC 24: Transitional resident
Meaning
1: A natural person is a transitional resident subsection (2)
a: satisfies at the time the general requirements of section FC 23
b: does not make an election under subsection (3) Period
2: The period for which a natural person may be a transitional resident—
a: begins from the first day of the residence required by section FC 23(a)
b: ends on the day that is the earlier of the following:
i: the day before the person ceases to be a New Zealand resident:
ii: the last day of the 48th month after the earliest month in which the person meets the requirements of section OE 1(1) or (2) section FC 23(a) Election not to be transitional resident
3: A person who would otherwise be a transitional resident in an income year may choose irrevocably by a notice under subsection (4) or (6)
a: beginning on or after the beginning of the income year; and
b: ending immediately before the person ceases to meet the requirements for being a transitional resident. Application for tax credit under subpart KD treated as election by person and by spouse or partner in certain circumstances
4: For a person who satisfies the requirements of subsection (5) section 41 of the Tax Administration Act 1994 subpart KD
a: a notice of an election under subsection (3) subsection (3)
b: a notice of an election under subsection (3) subsection (3)
c: for the period beginning with the first day of the period to which the application relates. Circumstances in which application treated as election
5: Subsection (4) section 41 of the Tax Administration Act 1994
a: is eligible to receive a credit of tax under subpart KD
b: makes the application—
i: on or after 1 April 2007; or
ii: before 1 April 2007 and does not give to the Commissioner before 1 June 2007 a notice that the person does not wish the application to be treated as a notice of an election under subsection (3) Notice of election
6: A notice under this subsection of an election under subsection (3)
a: in a form acceptable to the Commissioner; and
b: received by the Commissioner on or before the latest of the following:
i: the date by which section 37 of the Tax Administration Act 1994
ii: the date by which section 37 of the Tax Administration Act 1994
iii: the date allowed by the Commissioner upon application by or on behalf of the person. Application for extension of time for notice
7: An application under subsection (6)(b)(iii) section 37 of the Tax Administration Act 1994 subsection (6)(b)(i) and (ii)
2: Subsection (1)
a: under the law as amended by this Act, becomes on or after 1 April 2006 a person satisfying the requirements of section OE 1
b: under the law as immediately before being amended by this Act,—
i: does not meet the requirements of sections FC 23 OE 1
ii: meets the requirements of sections FC 23 OE 1
3: If, on a date (the current date subsection (2)(b)(ii) former law
a: the current date; and
b: a date, before the current date, on which the person under the former law—
i: would be a non-resident; and
ii: would be resident in New Zealand but for section OE 1(2B)
88: Transfer of property or obligations under financial arrangements deemed to be at market value
Section FE 5(2)
2: This section is overridden by section EE 34(2)
89: New Zealand net equity of New Zealand banking group
1: In section FG 8G(1) paragraph (b) EOI comparative value method or the deemed rate of return method comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
90: Disposal and resulting acquisition of property by spouse or de facto partner on death of person
1: In the heading to section FI 4 spouse or de facto partner spouse, civil union partner, or de facto partner
2: In section Fl 4, in the words before paragraph (a) to the surviving spouse or de facto partner of the deceased person of property to which section FI 1(3)(d) or (e) in a transaction to which section FI 1(3)(d) or (e)
3: In section FI 4(a) to property under the will or intestacy to other property (the other property
4: In section FI 4(b) the property the other property
91: Section F1 6 replaced
Section FI 6
FI 6: Disposal and resulting acquisition of timber
If a transaction to which section FI 1(3)(d) or (e) subpart FF .
92: Relationship of section F1 2(2) to subpart CB
1: Section FI 7(1)(a)
a: the transaction involves an interest in property that is land; and
ab: persons who are related within the second degree of relationship to the deceased person receive the land as beneficiaries—
i: under the transaction (the original transaction), section FI 1(3)(e)
ii: under a transaction to which section FI 1(3)(e) section FI 1(3)(d) .
2: In section FI 7(1)(b) or CB 10 CB 10, or CB 12
3: In section FI 7(1)(b) subsection (1) CB 10, or CB 12 or CB 12
4: In section FI 7(2) and CB 10 CB 10, and CB 12
5: In section FI 7(2) subsection (4) CB 10, and CB 12 and CB 12
6: In section FI 7(3) or CB 10 CB 10, or CB 12
7: In section FI 7(3) subsection (6) CB 10, or CB 12 or CB 12
93: Attributing interests in FIFs
1: Section GD 14(1)(b)
b: they calculate the FIF income or loss from the interest for the period ending with the disposal using the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method; and .
2: Section GD 14(3)(b)
b: they calculate the FIF income or loss from the interest for the period after the acquisition using the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method; and .
3: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
94: Taxable income to be calculated generally as if group were single company
1: In section HB 2(1)(c)(i) ; or ; and
2: In section HB 2(1)(d)(i) ; or ; and
3: In section HB 2(1)(e)(i) ; or ; and
4: Subsections (1) to (3)
95: Source of beneficiary income
In section HH 3C(1)
a: in the words preceding paragraph (a) either
b: in paragraphs (a) to (d) (e)(i) ; or :
96: Distributions by Maori authority
In section HI 4(3) ME 5 ME 35
97: New subpart HL inserted
After subpart HK
HL: Portfolio investment entities
Introductory provisions
HL 1: Intended effect on portfolio tax rate entities and investors
What this section does
1: This section describes the intended effects of this subpart and related provisions of the Act on a portfolio investment entity that is a portfolio tax rate entity and on an investor in a portfolio tax rate entity. Intended effect on portfolio tax rate entity
2: The intended effects for a person (the entity
a: has a tax liability, on proceeds of the investments that are allocated to investors who are natural persons,—
i: calculated using a portfolio investor rate for each investor; and
ii: resembling the total tax liability that the group of investors would have if the investors were to make the investments separately; and
b: has no tax liability on proceeds of the investments that are allocated to other investors; and
c: distributes to each investor amounts resembling the amounts that the investor would receive, after allowing for the tax paid by the entity, if making the investments separately. Intended effect on investor in portfolio tax rate entity
3: The intended effects for an investor in the entity are that the investor—
a: has no tax liability on income arising from proceeds for which the entity has a tax liability based on a portfolio investor rate of more than zero, unless the investor has given to the entity a portfolio investor rate that is lower than the correct rate; and
b: is liable for tax on any assessable income arising from proceeds for which the entity has a tax liability based on a portfolio investor rate of zero; and
c: receives on the investment in the entity an economic return resembling the return that the investor would receive after payment of tax liabilities if personally making investments similar to those made by the entity in which the investor has an interest. investor portfolio investment entity portfolio investor rate portfolio tax rate entity tax
HL 2: Scheme of subpart
Eligibility to be portfolio investment entity
1: The eligibility of an entity to be a portfolio investment entity is determined by sections HL 3 to HL 10 Election to be portfolio investment entity
2: An entity who is eligible to be a portfolio investment entity may choose under section HL 11 Becoming a portfolio investment entity
3: The time at which an entity becomes a portfolio investment entity and the effects of the change are given by sections HL 12 and HL 13 Ceasing to be a portfolio investment entity
4: The time at which an entity ceases to be a portfolio investment entity and the effects of the change are given by section HL 14 Portfolio allocation period and portfolio calculation period
5: An entity who is a portfolio tax rate entity has under section HL 15
a: a portfolio allocation period, which gives the length of the periods in the tax year to which the entity's income and outgoings are allocated; and
b: a portfolio calculation period, which gives the length of the periods in the tax year between each calculation by the entity of the amounts of income and outgoings allocated to each portfolio allocation period. Treatment of entity's income from property with no investor or with interest not vested
6: The treatment of income from an entity's property in which no investor has an interest, or in which the interest has not vested in an investor, is given by section HL 16 Portfolio entity tax liability
7: An entity who is a portfolio tax rate entity in a portfolio allocation period must pay income tax of an amount found from the following amounts:
a: the portfolio class net income or portfolio class net loss calculated under section HL 18
i: for each portfolio investor class and each portfolio allocation period:
ii: from the entity's assessable income and allowable deductions allocated to the class and the period
b: the portfolio class taxable income or portfolio class taxable loss calculated under section HL 19
i: for each portfolio investor class and each portfolio allocation period:
ii: from the portfolio class net income or portfolio class net loss for the class and the period and, if appropriate, any portfolio entity formation loss under section HL 28 section HL 29 section HL 30
c: the portfolio entity tax liability calculated under section HL 20
i: for each portfolio investor class of the entity and each portfolio allocation period in the tax year:
ii: from the portfolio class taxable income for the period, the portfolio investor interest fraction and portfolio investor rate for each investor in the class for the period. Payments of tax by portfolio tax rate entity
8: A portfolio tax rate entity is liable to pay tax equal to the amount of the entity's portfolio entity tax liability for a tax year by the payments required by sections HL 21 to HL 23 Portfolio investor allocated income and portfolio investor allocated loss
9: An investor in a portfolio tax rate entity in a tax year is treated as—
a: deriving income for the tax year equal to the amount by which the investor's total portfolio investor allocated income under section HL 24 section HL 24
b: having, if the investor is a zero-rated portfolio investor, for the tax year a deduction under section HL 25 section HL 24 section HL 24 Rebate to entity for some portfolio investor allocated loss
10: If a portfolio tax rate entity does not make an election under section HL 22 section HL 26 Treatment of tax credits
11: If a portfolio tax rate entity does not make an election under section HL 22 section HL 27 Portfolio investor proxies
12: An entity who meets the requirements of section HL 31
a: may be a portfolio investor proxy; and
b: must perform the obligations imposed by the section relating to a portfolio investor interest held by the entity for an investor. amount deduction income income tax income year investor portfolio allocation period portfolio calculation period portfolio class taxable income portfolio investment entity portfolio investor allocated income portfolio investor allocated loss portfolio investor class portfolio investor interest portfolio investor interest fraction portfolio investor proxy portfolio investor rate portfolio tax rate entity tax tax year Eligibility requirements: portfolio investment entities and foreign investment vehicles
HL 3: Eligibility requirements for entities
Eligibility requirements for portfolio tax rate entity and electing entity
1: A portfolio tax rate entity and an entity that is choosing under section HL 11 subsections (7), (8), and (10) Further eligibility requirements for portfolio tax rate entity
2: A portfolio tax rate entity must meet the further eligibility requirements described in subsection (9) and sections HL 6, HL 7, HL 9, and HL 10 Eligibility requirements for portfolio listed company and electing entity
3: A portfolio listed company and an entity that is choosing under section HL 11 subsections (7), (8), and (10) Further eligibility requirements for portfolio listed company
4: A portfolio listed company must meet the further eligibility requirements described in subsection (9) and sections HL 6, HL 8, HL 9, and HL 10 Eligibility requirements for portfolio defined benefit fund and electing entity
5: A portfolio defined benefit fund and an entity that is choosing under section HL 11 subsections (7), (8), and (10) Further eligibility requirements for portfolio defined benefit fund
6: A portfolio defined benefit fund must meet the further eligibility requirements described in sections HL 6, HL 9, and HL 10 Form and business requirement
7: The form and business requirement is that the entity—
a: must be a company, superannuation fund, or group investment fund; and
b: must not carry on a business of life insurance. Residence requirement
8: The residence requirement is that the entity must be—
a: resident in New Zealand; and
b: not treated under a double tax agreement as not being resident in New Zealand. Income interest requirement
9: The income interest requirement is that all portfolio investor interests in the entity that give rights in relation to proceeds from a portfolio entity investment give the rights in relation to all the proceeds from the investment that are not category B income. Entity history requirement
10: The entity history requirement is that the entity must not, before the day on which the election to be a portfolio investment entity is to be effective, have ceased to be a portfolio investment entity under section HL 14(1) amount company category B income double tax agreement group investment fund life insurance portfolio defined benefit fund portfolio entity investment portfolio investment entity portfolio investor interest portfolio listed company portfolio tax rate entity resident in New Zealand superannuation fund year
HL 4: Effect of failure to meet eligibility requirements for entities
Failure to meet certain requirements
1: An entity ceases under this section to be eligible to be a portfolio investment entity if the entity fails at any time to meet a requirement that is—
a: referred to in section HL 3
b: not referred to in subsection (2)(a) Failure to meet other requirements
2: An entity ceases under this section to be eligible to be a portfolio investment entity if—
a: the entity fails to meet a requirement under section HL 6, HL 9, or HL 10
i: beginning 6 months or more after the date on which the entity becomes a portfolio investment entity; and
ii: ending more than 3 months before an announcement by the entity to its investors that the entity is winding up within 12 months of the announcement; and
b: the entity's failure—
i: is significant and would not have occurred but for an event or circumstance within the control of the entity:
ii: is repeated on the last day of the quarter following the quarter referred to in paragraph (a) paragraph (a)(ii) investor portfolio defined benefit fund portfolio investment entity portfolio listed company portfolio tax rate entity quarter
HL 5: Foreign investment vehicles
When entity becomes foreign investment vehicle
1: An entity becomes a foreign investment vehicle if the entity—
a: is not resident in New Zealand; and
b: is a company or a superannuation scheme; and
c: has investors that would, if the entity were a portfolio investment entity, be a portfolio investor class meeting the investor membership requirements under section HL 6(1)(a), (b), (d), (e), (f), (g), (h), or (i)
d: meets the investor interest size requirements under section HL 9 section HL 9(3)(b)
e: meets the further eligibility requirements relating to investments under section HL 10 section HL 10(4)(b) When entity ceases to be foreign investment vehicle
2: An entity that becomes a foreign investment vehicle ceases under this section to be a foreign investment vehicle if the entity—
a: fails to meet a requirement under subsection (1)(a) and (b)
b: fails to meet a requirement under subsection (1)(c), (d), and (e)
i: on the last day of a quarter; and
ii: on the last day of the quarter following the quarter referred to in subparagraph (i) foreign investment vehicle portfolio investment entity portfolio investor class quarter resident in New Zealand superannuation scheme
HL 6: Investor membership requirement
Investor membership requirement for entity other than listed company
1: The investor membership requirement for a portfolio investor class of an entity that is not a company listed on a recognised exchange in New Zealand and does not meet the requirements of subsection (3)
a: 20 persons, treating—
i: all interests held by persons associated under section OD 8(3) subsection (5)
ii: all interests held by a portfolio investor proxy as being held by 1 person:
b: a portfolio investment entity:
c: a foreign investment vehicle:
d: an entity that—
i: meets the requirements in section HL 3
ii: has not chosen to be a portfolio investment entity:
e: a life insurer:
f: the New Zealand Superannuation Fund:
g: the Accident Compensation Corporation:
h: a Crown entity subsidiary of the Accident Compensation Corporation:
i: the Earthquake Commission:
j: less than 20 persons, as determined under paragraph (a)
i: the entity has 1 or more other portfolio investor classes that satisfy paragraph (a)
ii: no investor in the class, other than the entity's manager or trustee, can control the investment decisions relating to that class; and
iii: investors for which the entity would not meet the investor membership requirement in the absence of this paragraph have portfolio investor interests with a total value of less than 10% of the total value of portfolio investor interests in the entity. Investor membership requirement for listed company
2: The investor membership requirement for an entity that is a company listed on a recognised exchange in New Zealand is that—
a: the company must not have more than 1 portfolio investor class of investors holding portfolio investor interests in the company; and
b: each investor must be a member of the portfolio investor class; and
c: each portfolio investor interest in the company must be a share traded on the recognised exchange. No investor membership requirement for entities similar to unit trusts and certain superannuation funds
3: There is no investor membership requirement for an entity that,—
a: if treated as a unit trust, would meet the requirements of 1 or more of paragraphs (a) and (c) to (e)
b: is a superannuation fund established under the proposal for the restructuring of the National Provident Fund required by the National Provident Fund Restructuring Act 1990
c: is the fund established by the Government Superannuation Fund Act 1956 Interests of some associated investors included with interests of investor for some purposes
4: For the purposes of subsection (1) section OD 8(3)
a: the investor is not listed in subsection (1)(b) to (i)
b: the associated person is not listed in subsection (1)(b) to (i)
c: the associated person has a portfolio investor interest fraction of 5% or more. associated person company foreign investment vehicle group investment fund investor portfolio entity investment portfolio investment entity portfolio investor class portfolio investor interest portfolio investor proxy qualifying unit trust recognised exchange registered superannuation scheme unit trust
HL 7: Investor return adjustment requirement: portfolio tax rate entity
When this section applies
1: This section applies to a portfolio tax rate entity. Investor return adjustment requirement
2: The investor return adjustment requirement is that the entity must make an adjustment referred to in subsection (3)
a: the amount of the entity's portfolio entity tax liability; and
b: the amount of a rebate under section HL 26 or HL 27 Nature of adjustment
3: An adjustment reflecting the effect of the investor's portfolio investor rate must be made to—
a: the portfolio investor interest of each investor—
i: within 2 months of the end of the portfolio calculation period, if the entity has not made an election under section HL 22
ii: within 3 months of the end of the tax year, if the entity has made an election under section HL 22
b: the amount of each distribution to each investor. Investor may be offered choice of method
4: A portfolio tax rate entity may offer an investor a choice of the method of adjustment. company investor portfolio calculation period portfolio entity tax liability portfolio investor interest portfolio investor rate recognised exchange tax year unit trust
HL 8: Imputation credit distribution requirement: imputation credit account company
When this section applies
1: This section applies to a portfolio investment entity that is an imputation credit account company. Imputation credit requirement
2: The imputation credit distribution requirement is that when the entity makes a distribution to the members of a portfolio investor class, the distribution must be fully credited for the purposes of section CD 32 company group investment fund imputation credit imputation credit account investor portfolio entity tax liability portfolio investor interest portfolio investor rate portfolio tax rate entity recognised exchange tax year unit trust
HL 9: Investor interest size requirement
Investor interest size requirement
1: The investor interest size requirement for a portfolio investment entity is that an investor in a portfolio investor class may not hold more than 20% of the total portfolio investor interests of investors in the class. No investor interest size requirement for entities similar to unit trusts and certain superannuation finds
2: There is no investor interest size requirement for an entity that,—
a: if treated as a unit trust, would meet the requirements of 1 or more of paragraphs (a) and (c) to (e)
b: is a superannuation fund established under the proposal for the restructuring of the National Provident Fund required by the National Provident Fund Restructuring Act 1990
c: is the fund established by the Government Superannuation Fund Act 1956 Exception for certain investors
3: An entity with an investor holding more than 20% of the total portfolio investor interests in a class does not breach the investor interest size requirement if—
a: the entity is not a portfolio listed company and the investor is listed in subsection (4)
b: the entity is a portfolio listed company and the investor is listed in subsection (4) Investors to which exception applies
4: An investor may hold portfolio investor interests in a portfolio investment entity that would otherwise breach the investor interest size requirement for the entity if the investor is—
a: a portfolio investment entity:
b: a foreign investment vehicle:
c: a portfolio investor proxy holding an investment in a unit trust that satisfies 1 or more of paragraphs (a) and (c) to (e)
d: an entity that—
i: meets the requirements in section HL 3
ii: has not chosen to be a portfolio investment entity:
e: a life insurer:
f: the New Zealand Superannuation Fund:
g: the Accident Compensation Corporation:
h: a Crown entity subsidiary of the Accident Compensation Corporation:
i: the Earthquake Commission:
j: a person who meets the requirements of subsection (5) Exception for shares in portfolio listed company held from 17 May 2006
5: An investor who is not listed in subsection (4)(a) to (i) Interests of some associated investors included with interests of investor for some purposes
6: For the purposes of subsections (1) and (5) section OD 8(3)
a: the investor is not listed in subsection (4)(a) to (i)
b: the associated person is not listed in subsection (4)(a) to (i)
c: the associated person has a portfolio investor interest fraction of 5% or more. associated person company defined benefit fund foreign investment vehicle group investment fund investor life insurer New Zealand resident portfolio investment entity portfolio investor class portfolio investor interest portfolio investor interest fraction recognised exchange qualifying unit trust superannuation fund unit trust
HL 10: Further eligibility requirements relating to investments
Investment type requirement
1: The investment type requirement is that the entity must use, or have available to use, 90% or more by value of the entity's assets in deriving income from the owning or trading of—
a: an interest in land:
b: a financial arrangement:
c: an excepted financial arrangement:
d: a right or option concerning property referred to in paragraphs (a) to (c) Income type requirement
2: The income type requirement is that the income allocated by an entity to a portfolio investor class must, to the extent of 90% or more,—
a: be derived from property referred to in subsection (1)
b: consist of the following:
i: dividends:
ii: income treated under subpart EW (Financial arrangements rules) as being derived by the entity:
iii: rent from an interest in land:
iv: proceeds from the disposal of property:
v: FIF income. Entity shareholding investment requirement
3: The entity shareholding investment requirement is that, for an investment of the entity consisting of shares in a company that is not listed in subsection (4)
a: the investment must carry voting interests in the company of less than 20%:
b: the market value of the investment, together with the market value of the entity's other investments carrying voting interests in a company of more than 20%, must be less than 10% of the total market value of the entity's investments. Investments not affected by shareholding investment requirement
4: The investments referred to in subsection (3)
a: a portfolio investment entity:
b: a foreign investment vehicle:
c: an entity that—
i: meets the requirements in section HL 3
ii: has not chosen to be a portfolio investment entity:
d: a life insurer:
e: a portfolio land company. Class shareholding investment requirement
5: The class shareholding investment requirement is that, for each portfolio investor class and each investment referred to in subsection (3)
a: correspond to voting interests in the company of less than 20%:
b: have a market value that, together with the market value of the class's other interests that correspond to voting interests in a company of more than 20%, is less than 10% of the total market value of the class's interests in investments. amount company dividend excepted financial arrangement FIF income financial arrangement foreign investment vehicle futures contract income interest investor portfolio class fraction portfolio class investment value portfolio entity investment portfolio investment entity portfolio investor class portfolio land company share Becoming and ceasing to be portfolio investment entity
HL 11: Election to become portfolio investment entity and cancellation of election
Notice of election
1: An entity that meets the eligibility requirements in section HL 3 When election effective
2: An election received by the Commissioner is effective on the latest of the following:
a: 1 October 2007:
b: the date of formation of the entity:
c: the date nominated in the notice:
d: the date 30 days before the day of receipt. Notice of cancellation
3: An entity may choose at any time to cease being a portfolio investment entity by giving a notice in the prescribed form to the Commissioner. When cancellation effective
4: An election to cease being a portfolio investment entity received by the Commissioner takes effect from the later of the following:
a: the date on which the entity became a portfolio investment entity:
b: the date nominated in the notice:
c: the date of receipt. Commissioner company notice portfolio investment entity quarter recognised exchange tax year
HL 12: Becoming portfolio investment entity
Requirement for effective election
1: An entity that makes an election under section HL 11
a: the entity cancels the election:
b: the entity on the last day of each quarter in the period fails to meet 1 or more of the eligibility requirements in section HL 3 Income year for electing entity
2: If an entity with a non-standard income year chooses to become a portfolio tax rate entity making payments of tax under section HL 21 or HL 23, section 39 of the Tax Administration Act 1994
a: the day before the day on which the election is effective were the original balance date of the entity; and
b: the next 31 March after the day on which the election is effective were a new balance date approved by the Commissioner for the entity. Entity treated as disposing of and reacquiring, property
3: If an entity becomes a portfolio investment entity, the entity is treated for the purposes of this Act as, on the day before the day on which the election is effective,—
a: transferring to another person all shares held by the entity that—
i: satisfy section CX 44C(1)(a) and (b)
ii: are shares in a company that is not a portfolio investment entity and does not become a portfolio investment entity within the period of 6 months beginning from the day on which the entity becomes a portfolio investment entity; and
b: receiving for the shares referred to in paragraph (a)
c: acquiring the shares referred to in paragraph (a) paragraph (b) amount Commissioner company group investment fund life insurer portfolio investment entity portfolio tax rate entity share superannuation fund tax year
HL 13: Tax consequences from transition
No penalty or interest arising from transition
1: An entity that becomes a portfolio investment entity is not liable to pay any penalty or interest for which the entity would otherwise be liable for an inaccuracy in an estimate, or shortfall in the payment, of provisional tax to the extent that the inaccuracy or shortfall arises because of—
a: the effect of the election on the length of the entity's income year under section HL 12(2)
b: the disposal and acquisition referred to in section HL 12(3) Payment of tax liability arising from transition
2: An entity that becomes a portfolio investment entity in a tax year and is liable to pay an amount of income tax (the —tax amount section HL 12(3)
a: one third of the tax amount, in the tax year in which the entity becomes a portfolio investment entity; and
b: one half of the balance of the tax amount remaining owing after the payments made under paragraph (a)
c: the balance of the tax amount remaining owing after the payments made under paragraphs (a) and (b) income tax income year interest portfolio investment entity provisional tax tax year
HL 14: Ceasing to be portfolio investment entity
Cancellation or loss of eligibility
1: An entity that has chosen to be a portfolio investment entity ceases to be a portfolio investment entity if—
a: the entity cancels the election under section HL 11
b: the entity is no longer eligible to be a portfolio investment entity under section HL 4 When entity ceases to be portfolio investment entity
2: An entity ceases to be a portfolio investment entity under subsection (1)
a: the day on which the entity's election under section HL 11
b: the first day of the quarter following the quarter in which the entity ceases under section HL 4 Entity treated as disposing of and reacquiring, property
3: An entity that ceases to be a portfolio investment entity is treated for the purposes of this Act as—
a: disposing of all shares held by the entity that satisfy section CX 44C(1)(a) and (b)
b: acquiring the shares referred to in paragraph (a) paragraph (a) amount portfolio investment entity quarter share Periods relevant to calculation of portfolio entity tax liability
HL 15: Portfolio allocation period and portfolio calculation period
When this section applies
1: This section applies to a portfolio tax rate entity. Portfolio allocation period
2: The portfolio allocation period for the entity for a tax year is—
a: a day, if the entity does not choose a portfolio allocation period under paragraph (b) or (c)
b: a quarter, if the entity chooses the portfolio allocation period by giving a notice to the Commissioner—
i: before the tax year:
ii: when the entity chooses to become a portfolio tax rate entity; or
c: a day, month, quarter, or income year, if the entity chooses to have a portfolio calculation period of an income year under subsection (3)(c) subsection (3)(c) Portfolio calculation period
3: The portfolio calculation period for the entity for a portfolio allocation period in a tax year is—
a: a day, if the entity chooses the portfolio calculation period by giving a notice to the Commissioner—
i: before the tax year:
ii: when the entity chooses to become a portfolio tax rate entity; or
b: a quarter, if the entity does not choose a portfolio calculation period under paragraph (a) or (c)
c: an income year, if the entity—
i: chooses under section HL 22
ii: chooses the poi (folio calculation period by giving a notice to the Commissioner when the entity makes the election under section HL 22 Commissioner notice portfolio allocation period portfolio calculation period portfolio tax rate entity quarter tax year Allocation of income in some cases
HL 16: Treatment of income not allocated to investor, allocated but not vested in investor
Treatment of unallocated income
1: If a portfolio tax rate entity has income or property in which no investor has a portfolio investor interest and in which no investor is treated as having an interest under subsection (2) Treatment of income allocated before vesting in investor
2: A portfolio tax rate entity that is a superannuation fund may treat a portfolio investor interest that is not vested in an investor for a portfolio allocation period as being vested in the investor for the purposes of section HL 20
a: the portfolio investor interest is purchased by or for the investor's employer; and
b: under an agreement between the investor and the investor's employer, subject to any contingencies, the interest will vest in the investor in or before the end of a period (the vesting period
c: the agreement exists before the portfolio allocation period; and
d: the vesting period ends after the portfolio allocation period; and
e: the vesting period,—
i: if the entity exists on 17 May 2006, does not exceed the longest vesting period allowed by the entity on 17 May 2006 for an interest created on 17 May 2006; or
ii: if the entity does not exist on 17 May 2006, does not exceed 3 years. income investor portfolio investor class portfolio investor interest portfolio tax rate entity superannuation fund
HL 17: Certain new investors treated as part of existing portfolio investor class
A person who becomes an investor in a portfolio tax rate entity may be treated by the entity as a member of an existing portfolio investor class, of which the investor would not be a member in the absence of this section, if—
a: the investor acquires portfolio investor interests that the entity intends to qualify the investor as a member of the class; and
b: the interests do not qualify the investor as a member of the class because the entity does not have sufficient portfolio entity investments corresponding to the interests; and
c: the entity acquires sufficient portfolio entity investments to qualify the investor as a member of the class as soon after the investor's acquisition of the interests as is practicable. investor portfolio investor class portfolio investor interest portfolio investor investment Calculating portfolio entity tax liability
HL 18: Portfolio class net income and portfolio class net loss for portfolio allocation period
Portfolio class net income for portfolio allocation period
1: The portfolio class net income under this section for a portfolio investor class for a portfolio allocation period is—
a: the amount calculated for the period under subsection (3)
b: zero, if paragraph (a) Portfolio class net loss for portfolio allocation period
2: The portfolio class net loss
a: the amount by which zero exceeds the amount calculated for the period under subsection (3)
b: zero, if paragraph (a) Calculation of amount for portfolio allocation period
3: The amount calculated under this subsection for the portfolio allocation period is the amount calculated using the formula— class assessable income − class deductions. Definition of items in formula
4: In the formula,—
a: class assessable income
i: the portfolio investor class; and
ii: the portfolio allocation period:
b: class deductions
i: for which the entity is allowed a deduction; and
ii: incurred by the portfolio investment entity in deriving assessable income allocated to the portfolio investor class; and
iii: allocated by the entity to the portfolio allocation period. amount assessable income deduction portfolio allocation period portfolio class fraction portfolio class net loss portfolio entity investment portfolio investment entity portfolio investor class
HL 19: Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period
Portfolio class taxable income for portfolio allocation period
1: The portfolio class taxable income
a: the amount calculated for the period under subsection (3)
b: zero, if paragraph (a) Portfolio class taxable loss for portfolio allocation period
2: The portfolio class taxable loss
a: the amount by which zero exceeds the amount calculated for the period under subsection (3)
b: zero, if paragraph (a) Calculation of amount for portfolio allocation period
3: The amount calculated under this subsection for the portfolio investor class and the portfolio allocation period is calculated using the formula— class net income − class net loss− other loss used. Definition of items in formulas
4: The items in the formula are defined in subsections (5) to (7) Class net income
5: Class net income section HL 18 Class net loss
6: Class net loss section HL 18 Other loss used
7: Other loss used
a: the total amount for the class of—
i: the portfolio entity formation loss that has not been offset against portfolio class net income for an earlier allocation period and may be allocated to the allocation period under section HL 28
ii: the portfolio class land loss that has not been offset against portfolio class net income for an earlier allocation period and may be allocated to the allocation period under section HL 30
b: the total amount of the class net income referred to in subsection (5) amount portfolio allocation period portfolio class land loss portfolio class net income portfolio class net loss portfolio class taxable income portfolio class taxable loss portfolio entity formation loss portfolio investor class portfolio investor interest tax year
HL 20: Portfolio entity tax liability and rebates of portfolio tax rate entity for period
Portfolio entity tax liability
1: The portfolio entity tax liability calculation period
a: the total of the amounts calculated under subsection (3)
b: zero, if paragraph (a) Amount of rebate under section KI 1
2: For the purposes of section KI 1
a: the amount by which zero exceeds the total of the amounts calculated under subsection (3)
b: zero, if paragraph (a) Calculation of amount for calculation period
3: The amount calculated under this subsection for an investor and calculation period is the total of the amounts calculated using the formula in subsection (4)
a: each day of a portfolio allocation period in the calculation period; and
b: each portfolio allocation period in the calculation period; and
c: the portfolio investor class of the investor. Formula
4: The formula is— Definition of items in formula
5: The items in the formula are defined in subsections (6) to (10) Investor fraction
6: Investor fraction Income
7: Income section HL 19 Loss
8: Loss section HL 19 Rate
9: Rate
a: the portfolio investor rate for the investor for the portfolio allocation period, if paragraph (b)
b: 33%, if the entity is treated as the sole investor under section HL 16 Days in allocation period
10: Days in allocation period is the number of days in the portfolio allocation period. amount investor portfolio allocation period portfolio class taxable income portfolio investor class portfolio investor interest fraction portfolio investor rate portfolio tax rate entity tax year Payment by portfolio tax rate entity of tax for tax year
HL 21: Payments of tax by portfolio tax rate entity making no election
When this section applies
1: This section applies to a portfolio tax rate entity for a tax year if the entity does not make an election under section HL 22 or HL 23 Portfolio calculation period
2: The portfolio calculation period of the entity for the tax year must be a quarter. Amount of payments
3: After each portfolio calculation period for the tax year, the entity must make a payment to the Commissioner—
a: of an amount of income tax equal to the portfolio entity tax liability of the entity for the portfolio calculation period; and
b: within the period of 1 month beginning from the end of the portfolio calculation period. Entity not required to pay provisional tax
4: The entity is not required to pay provisional tax under subpart MB (Provisional tax) for the tax year. Payment to Commissioner of residual value of investor's interest
5: If an investor in the entity has, at the end of the investor's portfolio investor exit period, a portfolio investor interest with a value of more than zero, the entity must pay an amount equal to the value of the interest to the Commissioner at the same time as the payment referred to in subsection (3) Commissioner income tax interest portfolio calculation period portfolio entity tax liability portfolio investor exit period portfolio tax rate entity provisional tax quarter tax year
HL 22: Payments of tax by portfolio tax rate entity choosing to pay provisional tax
When this section applies
1: This section applies to a portfolio tax rate entity for a tax year—
a: the portfolio calculation period of the entity for the tax year is the income year corresponding to the tax year; and
b: the entity chooses to be subject to this section for the tax year. Provisional tax
2: The entity must pay provisional tax under subpart MB Notice of election
3: The entity must give the Commissioner notice of an election to be subject to this section—
a: in the prescribed form; and
b: by the date by which the entity is required to choose a portfolio allocation period and portfolio calculation period for the tax year. Commissioner notice portfolio allocation period portfolio calculation period portfolio tax rate entity provisional tax tax year year
HL 23: Payments of tax by portfolio tax rate entity choosing to make payments when investor leaves
When this section applies
1: This section applies to a portfolio tax rate entity for a tax year if—
a: the portfolio allocation period and the portfolio calculation period of the entity for the tax year are 1 day; and
b: the entity chooses to be subject to this section for the tax year. Amount of payment for withdrawing investor
2: After each portfolio investor exit period for an investor in a portfolio investor class, the entity must make a payment to the Commissioner—
a: of an amount of income tax equal to the portfolio entity tax liability of the entity for—
i: the portfolio investor exit period; and
ii: the investor as a member of the portfolio investor class; and
b: within the period of 1 month beginning from the end of the month in which the portfolio investor exit period ends. Amount of payment for investors remaining at end of tax year
3: After each tax year, the entity must make a payment to the Commissioner—
a: of an amount of income tax equal to the entity's portfolio entity tax liability for the tax year for the investors in the entity at the end of the tax year, allowing for any payment made under subsection (2)
b: within the period of 1 month beginning from the end of the tax year. Entity not required to pay provisional tax
4: The entity is not required to pay provisional tax under subpart MB Notice of election
5: The entity must give the Commissioner notice of an election to be subject to this section—
a: in the prescribed form; and
b: by the date by which the entity is required to choose a portfolio allocation period and portfolio calculation period for the tax year. Commissioner income tax interest investor notice portfolio allocation period portfolio calculation period portfolio entity tax liability portfolio investor class portfolio investor exit period portfolio tax rate entity provisional tax tax year Results for investors
HL 24: Portfolio investor allocated income and portfolio investor allocated loss
When this section applies
1: This section applies to a person who is treated by a portfolio tax rate entity or portfolio investor proxy as an investor in a portfolio tax rate entity on a day in a tax year. Portfolio investor allocated income for period
2: The person is treated as deriving in the tax year from the portfolio investment entity an amount of portfolio investor allocated income
a: the amount described in subsection (4)
b: zero, if paragraph (a) Portfolio investor allocated loss for period
3: The person is treated as having in the tax year in relation to the entity an amount of portfolio investor allocated loss
a: the amount by which zero is more than the amount given by subsection (4) subsection (4)
b: zero, if paragraph (a) Amount
4: The amount that determines whether an investor has portfolio investor allocated income or portfolio investor allocated loss for a tax year is the total of the amounts calculated using the formula in subsection (5)
a: each portfolio allocation period in the tax year; and
b: each day of the portfolio allocation period; and
c: each portfolio investor class to which the investor belongs on the day. Formula
5: The formula is— Definition of items in formula
6: In the formula,—
a: investor fraction
b: class income section HL 19
c: class loss section HL 19
d: days in period amount investor portfolio allocation period portfolio class taxable income portfolio class taxable loss portfolio investment entity portfolio investor allocated income portfolio investor allocated loss portfolio investor class portfolio investor interest fraction portfolio investor proxy tax year
HL 25: Treatment of portfolio investor allocated loss for zero-rated portfolio investors and investors with portfolio investor exit period
When this section applies
1: This section applies for an investor in a portfolio tax rate entity for a period in a tax year, if—
a: the investor is a zero-rated portfolio investor and the period is a tax year:
b: the entity makes payments of income tax under section HL 21 Deduction for excess of portfolio investor allocated loss
2: The investor has a deduction under section DB 43B(1) section HL 24 amount deduction income year investor portfolio allocation period portfolio investor allocated income portfolio investor allocated loss portfolio investor exit period tax year zero-rated portfolio investor Rebate for entity
HL 26: Treatment of portfolio investor allocated loss for other investors
Investor in entity making payments of tax under section HL 21
1: A portfolio tax rate entity that makes payments of tax under section HL 21 section KI 1
a: the portfolio calculation period does not include a part of a portfolio investor exit period for the investor; and
b: the investor is not a zero-rated portfolio investor. Investor in entity making payments of tax under section HL 23
2: A portfolio tax rate entity that makes payments of tax under section HL 23 section KI 1 amount deduction income year investor portfolio allocation period portfolio investment entity portfolio investor allocated income portfolio investor allocated loss portfolio investor rate tax year zero-rated portfolio investor Treatment of credits received by entity
HL 27: Credits received by portfolio tax rate entity or portfolio investor proxy
When this section applies
1: This section applies to an entity that receives an imputation credit, a credit for tax paid in a foreign country or territory, or a credit for tax paid or withheld if the entity is—
a: a portfolio tax rate entity that has not made an election under section HL 22
b: a portfolio investor proxy for an investor in a portfolio tax rate entity that has not made an election under section HL 22 Use of credit by entity
2: The entity may not, except as allowed by this section,—
a: use the credit to reduce the liability of the entity for income tax or to obtain a refund of income tax:
b: attach the credit to any distribution or transfer the credit to any other person. Tax credit allocated to investor
3: For a portfolio allocation period to which the entity allocates a credit, the amount of the credit that is allocated to an investor is the total of the amounts calculated using the formula in subsection (4) Formula
4: The formula is— Definition of items in formula
5: In the formula in subsection (4)
a: credit
b: class fraction
c: investor fraction
d: days in period Application of subsections (7) to (11)
6: For an investor in a portfolio tax rate entity who is allocated under subsection (3)
a: subsections (7) and (8)
i: to credits allocated to the tax year, if the investor is a zero-rated portfolio investor:
ii: to credits allocated to a portfolio allocation period that is part of a portfolio investor exit period, if the entity makes payments of tax under section HL 21
b: subsection (9) section HL 23
c: subsections (10) and (11) subsections (7) and (9) Zero-rated portfolio investor or investor with portfolio investor exit period for interest in entity that makes payments under section HL 21
7: The investor is treated as receiving for the tax year for the allocated credits,—
a: if the credits are under subpart LC
i: the amount of the allocated credits:
ii: the amount calculated by multiplying the amount of portfolio investor allocated income for the investor for the tax year by the basic rate of tax for the investor for the tax year under schedule 1
b: if the credits are not under subpart LC Reduction of credit
8: The amount of a credit received by an investor under subsection (7)(b) or (9)
a: the amount of the credit:
b: the amount found by multiplying 0.33 and the amount of portfolio entity formation loss allocated to the investor for the income year that has not previously reduced—
i: a deduction, under section DB 43B(2)
ii: a rebate, under section KI 1(3)
iii: a credit, under this subsection. Investor with portfolio investor exit period for interest in entity that makes payments under section HL 23
9: The investor is treated as receiving for the tax year of the portfolio calculation period, for credits other than under subpart LC Other investor: credit for entity for foreign tax credits
10: The entity is treated as receiving for the tax year of the portfolio calculation period, for credits under subpart LC
a: the total of—
i: the credits allocated to the portfolio calculation period; and
ii: the credits allocated to earlier portfolio calculation periods in the tax year and not used by the entity as a credit against income tax payable for those portfolio calculation periods:
b: the amount of the entity's portfolio entity tax liability for the portfolio calculation period for the investor. Other investor: credit for entity for other credits
11: The amount of the credits not under subpart LC subsection (2)
a: a credit against tax payable by the entity of the amount that is the lesser of the following:
i: the amount of the credits:
ii: the amount referred to in subsection (10)(b) subsection (10)
b: a rebate of tax under section KI 1 paragraph (a) amount income tax investor net income portfolio allocation period portfolio class fraction portfolio entity investment portfolio investment entity portfolio investor allocated income portfolio investor class portfolio investor exit period portfolio investor interest fraction portfolio investor proxy tax year zero-rated portfolio investor Treatment of losses for entity
HL 28: Portfolio entity formation loss
Portfolio entity formation loss
1: The portfolio entity formation subparts IE and IF Carrying forward portfolio entity formation loss of entity other than portfolio tax rate entity
2: The portfolio entity formation loss of a portfolio investment entity that is not a portfolio tax rate entity or that makes payments of income tax under section HL 22 subparts IE and IF Increase in portfolio entity formation loss if allocation results in reduction of deduction, credit, or rebate
3: If portfolio entity formation loss is allocated by a portfolio tax rate entity that makes payments of tax under section HL 21 or HL 23 current year
a: the amount of any reduction under section DB 43B(2) section DB 43B(1)
b: the amount of any reduction of credit under section HL 27(8)
c: the amount of any reduction of rebate under section KI 1(3) amount net income net loss portfolio allocation period portfolio class net income portfolio entity formation loss portfolio investment entity portfolio tax rate entity
HL 29: Portfolio class taxable income and portfolio class taxable loss for tax year
Portfolio class taxable income for tax year
1: The portfolio class taxable income
a: the amount calculated for the tax year under subsection (3)
b: zero, if paragraph (a) Portfolio class taxable loss for tax year
2: The portfolio class taxable loss
a: the amount by which zero exceeds the amount calculated for the tax year under subsection (3)
b: zero, if paragraph (a) Calculation of amount for tax year
3: The amount calculated under this subsection for the portfolio investor class and the tax year is the total of the amounts calculated for each portfolio allocation period in the tax year using the formula class tax income − class tax loss. Definition of items in formula
4: The items in the formula are defined in subsections (5) and (6) Class tax income
5: Class tax income section HL 19 Class tax loss
6: Class tax loss section HL 19 amount portfolio allocation period portfolio class taxable income portfolio class taxable loss portfolio investor class portfolio investor interest fraction tax year
HL 30: Treatment of portfolio class taxable loss and portfolio class land loss for tax year
Portfolio class taxable loss for tax year other than portfolio class land loss
1: If a portfolio investor class has, for a portfolio calculation period, a portfolio class taxable loss that is not a portfolio class land loss, the portfolio class taxable loss may not be carried forward to a later portfolio calculation period. Portfolio class land loss for tax year
2: If a portfolio investor class has a portfolio class land loss for a portfolio calculation period, the portfolio class land loss may be carried forward for the portfolio investor class to following portfolio calculation periods and used to reduce the amount of portfolio class taxable income under section HL 19 Meaning of portfolio class land loss
3: A portfolio class land loss
a: at the end of which, the class has interests in portfolio entity investments that—
i: are investments in land or shares in a portfolio land company; and
ii: have a portfolio class investment value that is more than 50% of the portfolio class investment value for all portfolio entity investments in which the class has interests; and
b: for which the class has a portfolio class taxable loss of more than zero. land net income net loss portfolio class investment value portfolio class land loss portfolio class taxable income portfolio class taxable loss portfolio entity investment portfolio investment entity portfolio investor class portfolio land company tax year Portfolio investor proxies
HL 31: Portfolio investor proxies
Eligibility of person to be portfolio investor proxy
1: An entity is eligible to be a portfolio investor proxy for an investor in a portfolio investment entity for a portfolio allocation period if—
a: the portfolio investment entity is not a portfolio listed company; and
b: the entity holds a portfolio investor interest for an investor in the portfolio investment entity; and
c: the entity gives to the portfolio investment entity—
i: a notice that the entity is holding the portfolio investor interest as a portfolio investor proxy; and
ii: other information that the Commissioner requires the entity to provide with the notice. Role of portfolio investor proxy
2: An entity who is a portfolio investor proxy holding a portfolio investor interest for an investor for a portfolio allocation period must perform the responsibilities given by subsection (3)
a: the entity were a portfolio investment entity; and
b: the portfolio investor interest were an interest of the investor in the income of the entity; and
c: the portfolio investor allocated income, portfolio investor allocated loss, and distributions received by the entity for the investor were income or loss—
i: of the entity; and
ii: to which the investor is entitled by the portfolio investor interest. Responsibilities of portfolio investor proxy
3: The responsibilities of an entity referred to in subsection (2)
a: allocate, to the investor, portfolio investor allocated income and portfolio investor allocated loss for the portfolio allocation period; and
b: distribute, to the investor, distributions and credits for the period; and
c: pay income tax on portfolio investor allocated income for the period; and
d: adjust the portfolio investor interest of the investor, or the distributions to the investor, to reflect the effect of the investor's portfolio investor rate on the amount of distributions under paragraph (b) paragraph (c)
e: provide to the Commissioner—
i: returns relating to the allocations, distributions, credits, and payments referred to in paragraphs (a) to (c)
ii: other information that the Commissioner requires the entity to provide. Commissioner income income tax investor loss notice portfolio allocation period portfolio investment entity portfolio investor allocated income portfolio investor allocated loss portfolio investor class portfolio investor interest portfolio investor proxy portfolio investor rate tax year . 2007-10-01 Subpart HL
97B: Application under section HL 11
Despite section 2(22) section HL 11 section 97 Section 97B inserted 1 April 2007 72 Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007
98: Net losses may be offset against future net income
After section IE 1(2B)
2BB: If a taxpayer is a portfolio tax rate entity that does not make payments of tax under section HL 22 2007-10-01 IE 1(2BB)
99: FIF net losses
1: In section IE 4
a: subsections (2) (3) (6)
b: in subsection (5) or (db) CQ 5(1)(d)
2: Subsection (1)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
100: Companies included in group of companies
In section IG 1(2) paragraph (a) , none of which is a portfolio investment entity, companies 2007-10-01 Section IG 1(2)
101: Group of companies FIF net losses
1: Section IG 5(2)
2: In section IG 5(4) subsection (2) or (3) subsection (3)
3: Subsections (1) (2)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
102: Rebate in respect of gifts of money
1: In section KC 5(1)(cp) Limited. Limited:
cq: Children on the Edge (NZ) Trust:
cr: DIPS'N Charitable Trust (International):
cs: The New Zealand Council of the Ramabai Mukti Mission Trust Board:
ct: Waterharvest Trust:
cu: Zonta International District 16 (New Zealand) Charitable Trust.
2: Subsection (1)
103: Determination of net income
1: After section KD 1(1)(e)(vii)
viii: any amount of portfolio investor allocated income that is not excluded income of the person and would be excluded income of the person in the absence of section CX 44D(1)(b) . 2007-10-01 Section KD 1(1)(e)(viii)
2: In section KD 1(1)(g)(ii)
a: in the formula, (c − d) c
b: in the definition of the item c, corresponds corresponds; and
c: the definition of the item d
104: Calculation of subpart KD credit
1: In section KD 2(2) IWP or CTC paragraph (a) : ; or
2: Subsection (1)
105: In-work payment
1: In section KD 2AAA
a: in subsection (1)(d) subsection (7) subsection (8)
b: in subsection (2) weeks weeks
a: for 2 or more eligible periods forming 1 continuous period, is the number of whole 1-week periods in the continuous period for which the principal caregiver or the principal caregiver's spouse, civil union partner, or de facto partner has, from the activity, income to which subsection (1)(d)(i) and (ii)
b: for an eligible period to which paragraph (a) subsection (1)(d)(i) and (ii) .
c: in subsection (5)(a)
i: in subparagraph (i) (x), (xi), (xii), (xiii), (xiv), (xv), and (xvi) (xi), (xii), (xiii), (xiv), and (xv)
ii: the following is inserted after subparagraph (ii)
iii: paid as a result of an incapacity, suffered before 1 January 2006, due to personal injury by accident within the meaning of section 26 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 .
2: Subsection (1)
106: Rules for subpart KD credit
1: Section KD 2AA(2) Principal caregiver
2: A person ( person A
a: a 4-month period:
b: the tax year:
c: the entitlement period, in the case of the parental tax credit.
2: Section KD 2AA(2B) Principal caregiver for eligible period for purposes of inwork payment
2B: A person ( person A section KD 2AAA(1)
3: Subsections (1) (2)
107: Calculation of family tax credit
1: In section KD 3(1) In this section In this section and section KD 3A
2: In section KD 3(1), paragraphs (bb) (bc) qualifying person
bb: the person is not a spouse, civil union partner, or de facto partner of a person who is eligible to be a transitional resident and who has not made an election under section FC 24(3) .
108: Allowance of credit of tax in end of year assessment
After section KD 4(4)
4B: A person is not liable for a shortfall penalty under Part 9 of the Tax Administration Act 1994
a: the person applied under section 41 of the Tax Administration Act 1994
b: at the time of the application, the person was eligible to be a transitional resident; and
c: before 1 June 2007, the person gave notice to the Commissioner that they did not wish the application to be treated under section FC 24(4) section FC 24(3)
109: Credit of tax by instalments
1: In section KD 5(6A)(b)(ii)
a: rates of family support credit amounts of family support credit, in-work payment
b: KD 2 KD 2, KD 2AAA,
2: Subsection (1)
110: Adjustment of family support amounts, abatement threshold amounts, amounts of in-work payment and parental tax credit, and amount of family tax credit
In section KD 5C(1)(d) the amount of the family tax credit the figure in the definition of the item amount
111: Commissioner to deliver credit of tax by instalments
1: In section KD 7(3A) any person a credit of tax any person a credit of tax with an income-tested benefit
2: Section KD 7(3C)
112: New subpart KI inserted
After subpart KH
KI: Rebates for portfolio tax rate entities
KI 1: Rebate for portfolio tax rate entity relating to certain investors
Rebate of income tax
1: A portfolio tax rate entity is allowed a rebate of income tax for a tax year of an amount given by subsection (2)
a: the investor is not a zero-rated portfolio investor; and
b: the entity does not make payments of tax under section HL 22
c: for an entity that makes payments of tax under section HL 21 Amount of rebate
2: The amount of the rebate of income tax is—
a: the amount of a tax credit allocated to the investor and the portfolio calculation period under section HL 27
b: the amount of a rebate under section HL 20(2) Reduction of rebate
3: The amount of a rebate received by an entity under subsection (2)
a: the amount of the rebate:
b: the amount found by multiplying 0.33 and the amount of portfolio entity formation loss allocated to the investor for the income year that has not previously reduced—
i: a deduction, under section DB 43B(2)
ii: a credit, under section HL 27(8)
iii: a rebate, under this subsection. imputation credit income tax investor portfolio class net income portfolio investor allocated loss portfolio investor exit period portfolio tax rate entity tax year zero-rated portfolio investor . 2007-10-01 Subpart KI
113: Credit of tax for imputation credit
After section LB 2(2B)
2C: A taxpayer that is a portfolio tax rate entity is entitled under this section to a credit of tax of no more than the extent allowed by subpart HL
2D: A taxpayer that is an investor in a portfolio tax rate entity is, to the extent allowed by subpart HL subsection (2C) 2007-10-01 Section LB 2(2C) Section LB 2(2D)
114: Credits in respect of tax paid in country or territory outside New Zealand
After section LC 1(1)
1B: A portfolio tax rate entity is allowed under this section a credit of tax of no more than the extent allowed by subpart HL
1C: An investor in a portfolio tax rate entity is, to the extent allowed by subpart HL subsection (1B) 2007-10-01 Section LC 1(1B) Section LC 1(1C)
115: Resident withholding tax payments to be credited against income tax assessed
In section LD 3 subsection (1)
1B: A portfolio tax rate entity is allowed under this section a credit of tax of no more than the extent allowed by subpart HL
1C: An investor in a portfolio tax rate entity is, to the extent allowed by subpart HL subsection (1B) 2007-10-01 Section LD 3 (1B) Section LD 3 (1C)
116: Credit of tax for dividend withholding payment credit in hands of shareholder
After section LD 8(1)
1B: A taxpayer that is a portfolio tax rate entity is entitled under this section to a credit of tax of no more than the extent allowed by subpart HL
1C: A taxpayer that is an investor in a portfolio tax rate entity is, to the extent allowed by subpart HL subsection (1B) 2007-10-01 Section LD 8(1B) Section LD 8(1C)
117: Refund to non-resident or exempt shareholders
Section LD 9(1B)(b)
118: New sections LD 10 and LD 11 added
After section LD 9
LD 10: Credit for investor for tax paid by entity if portfolio investor allocated income not excluded income
1: This section applies for a taxpayer and a tax year if the taxpayer has for the tax year portfolio investor allocated income from a portfolio tax rate entity that—
a: is not excluded income of the taxpayer; and
b: would be excluded income of the taxpayer in the absence of section CX 44D(1)(b)
2: The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the lesser of the following amounts:
a: the amount of income tax paid by the portfolio tax rate entity in relation to the portfolio investor allocated income referred to in subsection (1)
b: the amount by which the taxpayer's income tax liability exceeds the income tax liability for the tax year that the taxpayer would have in the absence of the portfolio investor allocated income.
LD 11: Credit for investor for payment under section HL 21(5) by entity for portfolio investor exit period
1: This section applies for a taxpayer and a tax year if—
a: the taxpayer has for the tax year portfolio investor allocated income from a portfolio tax rate entity for a portfolio investor exit period; and
b: the entity makes a payment under section HL 21(5)
2: The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the lesser of the following amounts:
a: the amount of the payment by the entity under section HL 21(5)
b: the amount by which the taxpayer's income tax liability exceeds the income tax liability for the tax year that the taxpayer would have in the absence of the portfolio investor allocated income. 2007-10-01 Section LD 10 Section LD 11
119: Amount of underlying foreign tax credit
In section LF 3(1) a section CD 10B section CD 10C
120: Provisional tax payable in instalments
1: In section MB 8(1) residual income tax provisional tax 2007-10-01 Section MB 8
2: Subsection (1)
121: Example: Section MB 13
1: The example after section MB 13 2007-10-01 Section MB 13
2: Subsection (1)
122: Example:
Section MB 14
1: The example after section MB 14 is replaced by the following: 2007-10-01 Section MB 14
2: Subsection (1)
123: Choosing to use GST ratio
1: In section MB 16 notice notify 2007-10-01 Section MB 16
2: Subsection (1)
124: Changing determination method
1: In section MB 17(4) first instalment date date of instalment A 2007-10-01 Section MB 17(4)
2: Subsection (1)
125: Calculating residual income tax in transitional years
1: In section MB 19(1)(a) transitional tax year transitional year 2007-10-01 Section MB 19(1)(a) Section MB 19(1)(b)
2: Subsection (1)
126: Example: Sections MB 20 to MB 24
1: The example after section MB 24 2007-10-01 Section MB 24
2: Subsection (1)
127: Examples:
Sections MB 26 MB 27
1: The examples after section MB 27 2007-10-01 Section MB 27
2: Subsection (1)
128: Application of provisions of Tax Administration Act 1994
1: In section MB 28(1) residual income tax provisional tax 2007-10-01 Section MB 28(1)
2: Subsection (1)
129: Limit on refunds and allocations of tax
In section MD 2(4) after the date of payment of the first instalment of provisional tax for that tax year after a credit is made to that company's imputation credit account for amounts that have satisfied the company's income tax liability for that tax year,
130: Limits on refunds of tax for certain qualifying unit trusts and group investment funds
1: Section MD 2A
1: A refund of income tax to which a qualifying unit trust or group investment fund becomes entitled in accordance with section MD 1 subsection (2)
a: goes into liquidation or chooses to become a portfolio investment entity; and
b: at the time of the liquidation or election, the trust or fund has—
i: a credit balance in its supplementary available subscribed capital account; and
ii: a zero balance in its imputation credit account.
2: The refund of income tax may not be more than the amount calculated according to the formula— credit balance × maximum imputation ratio where— credit balance maximum imputation ratio section ME 8(1) in which the dividend is paid a in which the liquidation occurs or the election is made .
2: Subsection (1)
131: Companies required to maintain imputation credit account
1: Section ME 1(2)(b)
b: a company resident in New Zealand which, under a double tax agreement, is treated as not being resident in New Zealand for the purposes of the double tax agreement; or .
2: In section ME 1(2)(j) authority. authority; or
k: a portfolio tax rate entity. 2007-10-01 Section ME 1(2)(j) Section ME 1(2)(k)
3: Subsection (1)
132: Debits arising to imputation credit account
1: In section ME 5(1)(ac) or as a person associated with a share user,
2: Subsection (1)
133: Company may elect to maintain dividend withholding payment account
In section MG 2(1) and is not a portfolio tax rate entity New Zealand 2007-10-01 Section MG 2(1)
134: Qualifying unit trust or group investment fund may elect to maintain supplementary available subscribed capital amount
In section MJ 1(1) is not a portfolio tax rate entity and category A income 2007-10-01 Section MJ 1(1)
135: Revocation of listing
1: In section NBB 4(2) 30 days notice
2: Section NBB 4(3)
3: The Commissioner may give 14 days notice of revocation, if, within 30 days of the date on which the notice of intended revocation is given under subsection (2)
3: In section NBB 4(4) a notice the 14 days' notice of revocation given
136: Listed PAYE intermediary claim form
1: Section NBB 5(5)
5: Despite subsection (4) subsection (3)
2: Subsection (1)
137: Private use of a motor vehicle: value of benefit
1: In section ND 1A(1C)(b)(ii) ceases to be leased ceases to be leased by the employer or an associated person without a consecutive or successive lease of the vehicle by the employer or an associated person
2: After section ND 1A(1D)
1E: Despite subsections (1B) to (1D) schedule 2
a: a vehicle is owned, leased or rented by the employer or an associated person; and
b: the employer or the associated person owned, leased or rented the vehicle:
i: during the initial return period for that vehicle, being a period beginning before 1 April 2006:
ii: before 1 April 2006.
1F: Subsection (1E)
a: the employer's initial return for the vehicle is for a period beginning on or after 1 April 2006 and the vehicle is not subject to an agreement or arrangement referred to in section CX 6B
b: the vehicle is owned by the employer or the associated person and there has been a period of 5 years after the beginning of the period of the employer's initial return for the vehicle.
3: Subsections (1) (2)
138: Subsidised transport: value of benefit
1: In section ND 1C(3) the benefit is the greater of— the benefit is the greatest of—
aa: 25% of the highest fare the third person charges the public for the equivalent transport (in terms of class, extent, and occasion), if the third person is a company in the same group of companies as the employer; and .
2: Subsection (1)
139: Meaning of prescribed interest
1: In section ND 1G paragraph (a) sections ND 1E sections ND 1D
2: Subsection (1)
140: Private use of motor vehicle: when schedular value not used
1: Section ND 1U(1)
1: This section applies when the employer has not valued the motor vehicle using schedule 2, part A, clause 6
2: Subsection (1)
141: Private use of motor vehicle: when schedular value used
1: Section ND 1V(1)
1: This section applies when the employer has valued the motor vehicle using schedule 2, part A, clause 6
2: In section ND 1V(2) clause 3(b)(i) clause 6(a)
3: In section ND 1V(3) clause 3(b)(ii) or (iii) clause 6(b), (c), (d), or (e)
4: Subsections (1) to (3)
142: Specified superannuation contribution withholding tax imposed
In section NE 2(1) unless either section NE 2AA(2), NE 2AB, or NE 2A(2) unless section NE 2A(2) or NE 2B
143: Sections NE 2AA and NE 2AB repealed
Sections NE 2AA NE 2AB
144: New section NE 2B inserted
After section NE 2A
NE 2B: Employer election that progressive rates of specified superannuation contribution withholding tax apply
If an employer makes a specified superannuation contribution on behalf of an employee for a tax year, the employer may choose that the employer, or a PAYE intermediary, pays specified superannuation contribution withholding tax on the specified superannuation contribution at the rate specified in schedule 1, part A, clause 10(a)
145: Specified superannuation contribution withholding tax to be deducted
1: In section NE 3 sections NE 2, NE 2AA, and NE 2AB section NE 2 or NE 2B
2: Section NE 3(2)
2: Subsection (1) sections NE 2(1), NE 2A(2), and NE 2B current specified superannuation contribution
a: an amount calculated under subsection (3)
b: an amount calculated under subsection (4)
2B: Subsection (1) sections NE 2(1), NE 2A(2), and NE 2B
a: is for the employee's complying superannuation fund; and
b: is subject to complying fund rules; and
c: is not more than the lesser of—
i: an amount calculated under section NE 3B(1)
ii: an amount calculated under section NE 3B(2)
3: In section NE 3(3) subsection (2)(b)(i) subsection (2)(a)
4: In section NE 3(4)
a: subsection (2)(b)(ii) subsection (2)(b)
b: previous exempt contributions previous exempt KiwiSaver contributions
5: In section NE 3(5)
a: in paragraph (b)(ii) subsection (2) subsection (2) or (2B)
b: in paragraph (c) period. period:
d: previous exempt KiwiSaver contributions
i: those contributions are made in the KiwiSaver calculation period, but excluding the current specified superannuation contribution; and
ii: subsection (2) .
6: In section NE 3(6) KiwiSaver contributions KiwiSaver scheme
146: New section NE 3B
After section NE 3
NE 3B: Calculation amounts in relation to current specified superannuation contribution for complying superannuation fund
1: For the current specified superannuation contribution, in section NE 3(2B)(c)(i) 0.04 × total salary or wages − previous exempt contributions.
2: For the current specified superannuation contribution, in section NE 3(2B)(c)(ii) total complying fund contributions − previous exempt complying fund contributions.
3: In the formulas,—
a: total salary or wages
b: previous exempt contributions
i: the contributions are made in the complying fund calculation period, but excluding the current specified superannuation contribution; and
ii: section NE 3(2) or (2B)
c: total complying fund contributions
i: deducted from the employee's salary or wages in the complying fund calculation period; and
ii: subject to complying fund rules:
d: previous exempt complying fund contributions
i: those contributions are made in the complying fund calculation period, but excluding the current specified superannuation contribution; and
ii: section NE 3(2B)
4: In this section, complying fund calculation period
a: beginning with the later of—
i: 1 year before when the employer makes the current specified superannuation contribution:
ii: when the employer is first required to deduct superannuation contributions that are subject to complying fund rules from the employee's salary or wages; and
b: ending with when the employer makes the current specified superannuation contribution.
147: Application of RWT rules
1: After section NF 1(2)(a)(iv)
ivb: interest that is exempt income by virtue of the application of section CW 22B .
2: In section NF 1(2)(b)(viii) CW 50: CW 50; or
ix: dividends that are exempt income by virtue of the application of section CW 22B .
3: In section NF 1(2)(b)(ix), as inserted by subsection (2) CW 22B: CW 22B; or
x: dividends that are excluded income by virtue of the application of section CX 44D . 2007-10-01 Section NF 1(2)(b)(ix)
4: Subsections (1) (2)
148: Liability to pay resident withholding tax
1: After section NF 2(7)
7B: A person (the first person second person
a: the first person receives notice from the second person that—
i: the second person is a transitional resident for a period (the transitional period
ii: payments during the transitional period from a source or sources (the specified sources section CW 22B
b: the first person receives the payment during the transitional period; and
c: the payment is from a specified source; and
d: the first person does not have reasonable grounds for believing that the payment is not exempt income of the second person under section CW 22B
2: Subsection (1)
149: Payment of deductions of resident withholding tax to Commissioner
1: In section NF 4(6B) emigration date date of the emigration time
2: Subsection (1)
150: Certificates of exemption
In section NF 9(1) paragraph (b)
c: any portfolio investment entity: . 2007-10-01 Section NF 9(1)
151: Amount of resident withholding tax deduction deemed to have been received
In section NF 12 under the RWT rules from any payment under the RWT rules from any payment other than a replacement payment under a share-lending arrangement
152: Application of NRWT rules
1: In section NG 1(2) paragraph (a) assessable income income
2: In section NG 1(2)(a) and dividends from portfolio listed companies investment society dividends 2007-10-01 Section NG 1(2)(a)
3: In section NG 1(2)(d) applies. applies; or
e: exempt income; or
f: income that is excluded income under section CX 44D(3)
4: Subsections (1) (3)
153: Payment of deductions of non-resident withholding tax to Commissioner
1: In section NG 11(4B) emigration date date of the emigration time
2: Subsection (1)
154: Liability to make deduction in respect of foreign withholding payment dividend
In section NH 1(1) that is paid that is not a portfolio tax rate entity and is paid 2007-10-01 Section NH 1(1)
155: Definitions
1: This section amends section OB 1
2: The definition of acquire acquire
a: make:
b: be granted, for a patent or plant variety rights:
c: lodge, for a patent application or a plant variety rights application .
3: After the definition of attributing interest Australian approved deposit fund section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust) Australian exempt public sector superannuation scheme section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust) .
4: After the definition of Australian imputation credit account company interest Australian regulated superannuation fund section 19 of the Superannuation Industry (Supervision) Act 1993 (Aust) Australian retirement savings account section 8 of the Retirement Savings Accounts Act 1997 (Aust) .
5: The definition of calculation method calculation method .
6: After the definition of completed complying fund calculation period section NE 3B(4) complying fund rules
a: are the same as the rules for KiwiSaver schemes in schedule 1, clauses 4(1) to (4), 7, and 9 of the KiwiSaver Act 2006
b: allow withdrawals in some or all of the circumstances described in the rules for KiwiSaver schemes in schedule 1, clauses 8 and 10 to 14 of the KiwiSaver Act 2006
c: do not allow withdrawals under any other circumstances except those described in paragraphs (a) and (b)
d: require a transfer of all or part of an employee's superannuation accumulation to another complying superannuation fund, or to a KiwiSaver scheme, if the employee requests such a transfer and, in the case of a transfer to a KiwiSaver scheme, the requirements of the KiwiSaver Act 2006
e: require that an employee's superannuation accumulation is subject to complying fund rules, if it is transferred to another complying superannuation fund in accordance with paragraph (d)
f: require a transfer of an employee's superannuation accumulation to a KiwiSaver scheme, if the employee does not request a transfer in accordance with paragraphs (d) and (e)
i: ceases to be eligible to be a member of their complying superannuation fund:
ii: may not remain a member for any reason except a transfer in accordance with paragraphs (d), (e), and (g)
g: require a transfer of an employee's superannuation accumulation to a KiwiSaver scheme, if the Government Actuary revokes approval of the superannuation fund as a complying superannuation fund and the accumulation is not transferred to another complying superannuation fund and is not subject to complying fund rules; and
h: require that the Commissioner is notified that the employee's superannuation accumulation must be transferred in accordance with paragraphs (f) and (g)
i: require total minimum superannuation contributions to be deducted in relation to an employee, equal to at least the amount required to be contributed to a superannuation scheme under section 25(1)(d) of the KiwiSaver Act 2006
j: for the purposes of calculating whether or not superannuation contributions count towards the total minimum superannuation contributions described in paragraph (i)
i: are the same as section 26 of the KiwiSaver Act 2006
ii: do not count a superannuation contribution unless the contribution is for the payment of future benefits to the employee, or for fees, under the superannuation fund; and
k: require that any specified superannuation contribution that counts towards the total minimum superannuation contributions described in paragraph (i)
l: are the same as the rules in section 196 of the KiwiSaver Act 2006
m: commit an employee to continue to be a member unless otherwise provided by rules described in paragraphs (a) to (l)
n: do not derogate from rules described in paragraphs (a) to (m) complying superannuation fund section 35 of the Superannuation Schemes Act 1989 .
7: After the definition of cost cost method section EX 45B .
8: In the definition of diminished value
a: in item a, paragraph (a)
a: on an improvement described in section DO 4 :
b: in item c, paragraph (b)
b: in the income year under this Act, except an amount allowed in the income year under section DB 37 section DO 4 .
9: In the definition of dispose paragraph (e)
e: for depreciable property, includes destroy, withdraw, or let lapse, but does not include the following:
i: for a patent application, conclude the patent application because a patent is granted in relation to the patent application:
ii: for a geothermal well, have the well cease to be available for use because section EE 6(4) .
10: The definition of eligible company eligible company
a: is resident in New Zealand; and
b: is not a foreign company; and
c: is not a loss attributing qualifying company; and
d: is not a company that only derives exempt income, except exempt income under sections CW 9 to CW 11
e: if the company is not a grandparented consolidated company,—
i: is incorporated in New Zealand or carrying on a business in New Zealand through a fixed establishment; and
ii: is not, by the law of another country or territory, liable to income tax in that country or territory by reason of domicile, residence, or place of incorporation .
11: In the definition of eligible period paragraph (e) last day last day; and
f: the person does not start or cease to be a ring-fenced family support recipient, other than on the first or, as applicable, the last day .
12: After the definition of employee share loan employee's superannuation accumulation
a: specified superannuation contributions vested completely in an employee:
b: deducted from the employee's salary or wages .
13: In the definition of employer's contributions to superannuation savings paragraph (a), subparagraph (ii)
ii: those on which specified superannuation contribution withholding tax was paid at the rate specified in schedule 1 clause 10(a) clause 10(a) .
14: In the definition of employment paragraph (e) that section that section and section KD 3A
15: After the definition of extra pay fair dividend rate method section EX 44B .
16: In the definition of FIF net loss sections DN 8 section
17: After the definition of finance lease finance-related deductions section HB 2(1)
a: an amount of interest incurred, other than an amount that arises only from movement in currency exchange rates:
b: an amount of expenditure under the financial arrangement rules or the old financial arrangements rules, other than an amount that arises only from movement in currency exchange rates .
18: In the definition of financial statements , section EG 3 and section ME 5
19: In the definition of fixed rate share
a: in paragraph (a) and any imputation credits or dividend withholding payment credits attached to any dividend issue of the share
b: in paragraph (e) FG 8G (New Zealand net equity of New Zealand banking group) EX 40 (Limits on choice of calculation methods), FG 8G (New Zealand net equity of New Zealand banking group),
20: After the definition of foreign investment fund foreign investment vehicle
a: has become a foreign investment vehicle under section HL 5(1)
b: has not ceased to be a foreign investment vehicle under section HL 5(2) . 2007-10-01 Section OB 1 foreign investment vehicle
21: After the definition of generally accepted accounting practice geothermal energy proving period
a: starting with the completion or acquisition of the well; and
b: excluding the case of the person disposing of the well to another person, ending when the well, for the foreseeable future, is not intended, and cannot reasonably be expected, to be used or available for use in—
i: deriving assessable income:
ii: carrying on a business for the purpose of deriving assessable income geothermal well .
22: After the definition of Government Superannuation Fund grandparented consolidated company current income year
a: the current income year is the 2005–06 or 2006–07 income year:
b: the company carries on a business, and the total amount of the company's finance-related deductions allocated to the income year (the previous income year
i: zero, because no deductions are allocated to the previous income year; or
ii: less than 50% of the company's total deductions allocated to the previous income year, calculated as if the company were not a member but nevertheless calculated in accordance with section HB 2(1) .
23: In the definition of grey list company company or territory country or territory
24: In the definition of imputation credit paragraph (c) section CD 10C(4) section CD 10B(4)
25: The definition of investor investor
a: for a group investment fund, a person who is entitled, by reason of the terms of the trust under which the group investment fund is established, to the income from the money, investments, and other property of the group investment fund:
b: for a portfolio investment entity that is a company, a shareholder in the company:
c: for a portfolio investment entity that is not a company, a person who is entitled, by reason of the rules of the portfolio investment entity or the terms of the trust under which the portfolio investment entity is established, to a proportion of the funds available for distribution by the entity as if the entity were a company and the investor were a shareholder in the company . 2007-10-01 Section OB 1 investor
26: The definition of KiwiSaver contributions KiwiSaver contributions Part 3, subpart 1 KiwiSaver Act 2006 .
27: The definition of KiwiSaver scheme KiwiSaver scheme section 4 of the KiwiSaver Act 2006 .
28: In the definition of lease paragraph (ab)
29: In the definition of non-participating redeemable share for the purposes of that section
30: In the definition of non-refundable credit paragraph (a)
ab: a credit allowed under section HL 27(7)(a) . 2007-10-01 Section OB 1 non-refundable credit
31: After the definition of operating lease operational allowance section CW 19(4) .
32: In the definition of ownership interest ownership interest section OD 5AA(7) ownership interests section OD 5AA(6)
33: The definition of patent application date
34: The definition of pay and allowances
35: After the definition of portable veteran's pension portfolio allocation period section HL 15 portfolio calculation period section HL 15 portfolio class fraction portfolio class investment value portfolio class net income section HL 18 portfolio class net loss section HL 18 portfolio class taxable income
a: for a tax year, in section HL 29
b: for a portfolio allocation period, in section HL 19 portfolio class taxable loss
a: for a tax year, in section HL 29
b: for a portfolio allocation period, in section HL 19 portfolio defined benefit fund
a: does not allocate income to investors; and
b: has become a portfolio investment entity under section HL 12
c: has not ceased to be a portfolio investment entity under section HL 14 portfolio entity formation loss section HL 28 portfolio entity investment section HL 10(1) portfolio entity tax liability section HL 20 portfolio investment entity
a: a portfolio tax rate entity:
b: a portfolio listed company:
c: a portfolio defined benefit fund portfolio investor allocated income section HL 24 portfolio investor allocated loss section HL 24 portfolio investor class
a: the portfolio entity investments are the same for all the investors in the group; and
b: each investor's interest in a portfolio entity investment represents a proportion (the investment proportion
c: the investment proportion for each investor and each portfolio entity investment differs from the average value of the investment proportion for the investors in the group and the portfolio entity investment by less than 2.5% of that average value portfolio investor exit period
a: for an entity that makes payments of tax under section HL 21
i: beginning with the beginning of a portfolio calculation period and ending with the fifth working day after the portfolio calculation period; and
ii: for which the amount of the entity's portfolio tax liability under section HL 20
b: for an entity that makes payments of tax under section HL 23
i: beginning with the later of the beginning of the tax year and the day on which the investor last became an investor in the entity; and
ii: ending on a day in the tax year on which the amount of the entity's portfolio tax liability under section HL 20 portfolio investor interest portfolio investor interest fraction portfolio investor proxy section HL 31 portfolio investor rate
a: 33%, if paragraphs (b) and (c)
b: the rate, if paragraph (c)
i: before the end of the period; and
ii: by a notice satisfying section 28B of the Tax Administration Act 1994
c: 0%, if—
i: the entity makes payments of tax under section HL 21
ii: the portfolio investor rate for the investor for the portfolio calculation period would, in the absence of this paragraph, be more than 0%; and
iii: the portfolio calculation period includes part of a portfolio investor exit period for the investor portfolio land company
a: is not a portfolio investment entity in the tax year; and
b: at the beginning of the tax year, owns property that—
i: consists of interests in land or shares in a portfolio land company that does not own, directly or indirectly, shares in the company; and
ii: has a market value equal to or more than 90% of the market value of all the property of the company portfolio listed company
a: has become a portfolio investment entity under section HL 12
b: has not ceased to be a portfolio investment entity under section HL 14 portfolio tax rate entity
a: has become a portfolio tax rate entity under section HL 12
b: has not ceased to be a portfolio tax rate entity under section HL 14
c: is not a company listed on a recognised exchange in New Zealand; and
d: is not a defined benefit fund . 2007-10-01 defs
36: In the definition of prescribed interest sections ND 1E sections ND 1D
37: After the definition of prescribed interest prescribed investor rate
a: 33%, if—
i: none of paragraphs (b) and (c)
ii: the person is a resident who derives income as a trustee and chooses to be subject to this paragraph for the tax year; or
b: 19.5%, unless paragraph (c)
i: $38,000 or less in taxable income; and
ii: a total amount of $60,000 or less in taxable income and portfolio investor allocated income; or
c: 0%, if the person is a resident who—
i: is an organisation or trust with income that is exempt income under section CW 34
ii: is a portfolio investment entity:
iii: is a company:
iv: is a superannuation fund:
v: derives income as a trustee and does not choose to be subject to paragraph (a)
vi: is a portfolio investor proxy for the portfolio allocation period . 2007-10-01 Section OB 1 prescribed investor rate
38: In the definition of principal caregiver paragraph (ab)
ab: the person is not a spouse, civil union partner, or de facto partner of a person who is eligible to be a transitional resident and who has not made an election under section FC 24(3) .
39: In the definition of provisional taxpayer paragraph (b)(i)
ib: a portfolio tax rate entity that does not make an election under section HL 22 . 2007-10-01 Section OB 1 provisional taxpayer
40: In the definition of qualifying person
a: paragraph (a)(iib) (iic)
iib: the person is not a spouse, civil union partner, or de facto partner of a person who is eligible to be a transitional resident and who has not made an election under section FC 24(3) :
b: in paragraph (c) that section that section and section KD 3A
41: In paragraph (c) refundable credit credit credit; or
d: for a payment made by a portfolio tax rate entity under section HL 21(5) .
42: In the definition of resident in Australia and for the purposes of the imputation rules
43: In the definition of schedular income paragraph (d)
db: income derived by a portfolio tax rate entity: . 2007-10-01 Section OB 1 schedular income
44: After the definition of share purchase scheme share reorganisation .
45: The definition of specified lease specified lease
a: the lease is entered in the period starting on 6 August 1982 and ending on 19 May 1999 and the lease has a guaranteed residual value, or has a term of the lease that is more than 36 consecutive months, or has a term of the lease that is the economic life of the asset because the Commissioner considers that the asset has an economic life of less than 36 months, and—
i: the lessee becomes the owner of the asset at the end of the term of the lease:
ii: the lessee has the option to purchase the asset at the end of the term of the lease at a price that the Commissioner considers will be significantly lower than the market value of the asset at the end of the term of the lease:
iii: the total of all personal property lease payments and the guaranteed residual value is more than or equal to, or to a small extent less than, the cost price of the asset:
iv: the lessor and the lessee agree that the lessee is liable for the payment of all, or nearly all, expenditure incurred for the costs of repair and maintenance of the asset and any other incidental costs arising during the term of the lease for the use of the asset:
b: the lease is entered in the period starting on 6 August 1982 and ending on 19 May 1999 and the lessee acquires ownership of the asset by any means, whether from the lessor or another person:
c: the lease is entered in the period starting on 28 October 1983 and ending on 19 May 1999 and—
i: a person other than the lessee acquires the asset; and
ii: the lessee and the person who acquires the asset are associated .
46: After the definition of spreading method SSCWT rate threshold amount
a: if the employee is employed by the employer for all of the tax year immediately before the tax year in which the specified superannuation contribution is paid, the total amount of—
i: salary and wages derived by the employee in that previous tax year; and
ii: specified superannuation contributions (being the gross amount of the contributions before deduction of specified superannuation contribution withholding tax) that the employer pays on behalf of the employee in that previous year; or
b: if paragraph (a)
i: salary and wages that the employer estimates will be derived by- the employee in the tax year in which the specified superannuation contribution is paid; and
ii: specified superannuation contributions (being the gross amount of the contributions before deduction of specified superannuation contribution withholding tax) that the employer estimates they will make on behalf of the employee in the tax year in which the specified superannuation contribution is paid .
47: After the definition of year of determination zero-rated portfolio investor section HL 21 2007-10-01 Section OB 1 zero-rated portfolio investor
48: Subsections (9) (10) (11) (17) (19)(a) (21) (22) (45)
49: Subsections (5) (7) (15) (16) (29)
a: beginning with the first day of the first income year for a person who does not make an election under paragraph (b)
b: beginning with the later of the first day of the first income year and 1 October 2007 for a person that is a company, group investment fund, or superannuation fund that intends to be a portfolio investment entity and chooses to delay the application to the person of changes made by this Act to the rules relating to FIFs by giving a notice to the Commissioner—
i: before 1 April 2007, if the person exists before that date; or
ii: within 1 month of the day on which the person comes into existence, if the person comes into existence on or after 1 April 2007 and before 1 October 2007.
50: Subsections (18) (19)(b) (30) (42) (46)
156: Modifications to measurement of voting and market value interests in case of continuity provisions
1: In section OD 5(6F) sections OD 3(3)(b) and OD 4(3)(b) and (d) sections OD 3(3)(d), OD 4(3)(d), and OD 9
2: Subsection (1)
a: has taken a tax position for an income year in a return provided to the Commissioner before 17 May 2006 that relies on the law that would apply if subsection (1)
b: fails to choose, in a notice of proposed adjustment or a response notice, to apply subsection (1)
3: If subsection (1) subsection (2) subsection (1)
157: Modifications to voting and market value interests for application of continuity provisions to reverse takeover
1: In section OD 5AA(2)(e) are treated under section OD 5(6)(b) are held by persons
2: In section OD 5AA(2)(f)
a: in subparagraph (i) that the initial owners hold initial parent
b: in subparagraph (ii) held the total ownership held the ownership
3: Subsections (1) (2)
158: Further definitions of associated persons
In section OD 8(3)
a: EE 34 EE 33
b: HL 6, HL 9, HK 11, 2007-10-01 Section OD 8(3)
159: Determination of residence of person other than company
1: In section OE 1, subsection (2B)
2: Subsection (1)
160: Schedule 1—Basic rates of income tax and specified superannuation contribution withholding tax
1: In schedule 1, part A, after clause 5
6: Portfolio tax rate entity
The basic rate of income tax on all taxable income of a portfolio tax rate entity is the effective rate of tax found by dividing the amount of the portfolio entity tax liability of the entity under section HL 20 .
2: In schedule 1, part A, clause 10, paragraphs (a) (aa)
a: the rate specified in part C, if the employer has made an election under section NE 2B .
3: In schedule 1, in the heading to part C (aa) (a)
4: In schedule 1, part C
a: the heading for the first column is replaced by The SSCWT rate threshold amount for the employee for the year in which the specified superannuation contribution is paid
b: $9,500 $11,400
c: $38,000 $45,600
161: Schedule 2—Fringe benefit values
1: Schedule 2, part A, clause 3
3: In this schedule, a motor vehicle's tax value in a quarter in a tax year, in a tax year, or in an income year is—
a: the value of the vehicle, as determined under subpart EE (Depreciation) for the beginning of the tax year or income year, if paragraphs (b) and (c)
b: the cost price of the vehicle, if the vehicle is acquired after the beginning of the tax year or income year and paragraph (c)
c: determined under clause 3B person A person B
3B: For person A and the purposes of clause 3(c) subpart EE
a: clause 3C
i: the cost price was last used by person A or person B for the vehicle under clause 1
ii: the vehicle was not subject to clause 1 clause 3(c) clause 1
b: clause 3D clause 1
c: clause 3E clause 1
3C: The highest of the following amounts is the relevant amount for the purposes of clause 3B(a)
a: the highest cost of the vehicle to person A on any acquisition of it by them:
b: the highest cost of the vehicle to person B on any acquisition of it by them.
3D: The highest of the following amounts is the relevant amount for the purposes of clause 3B(b)
a: the tax value of the vehicle under this schedule for person B, immediately before the last disposal of the vehicle by them:
b: the cost of the vehicle to person A on acquisition.
3E: The highest of the following amounts is the relevant amount for the purposes of clause 3B(c)
a: the tax value of the vehicle under this schedule for whichever of person A or person B last used tax value for the vehicle under clause 1
b: the cost of the vehicle to person A on the last acquisition of it by them.
2: In schedule 2, part A, clause 7, the words before paragraph (a)
7: When a vehicle is leased or rented to the person after it has been leased or rented to another person (the other person .
3: Subsection (2)
162: Schedule 4—Foreign investment funds
In the shoulder reference, EX 33B, EX 33C, EX 33D, EX 33
163: Schedule 6B—Expenditure in avoiding, remedying, or mitigating detrimental effects of discharge of contaminant
In schedule 6B, in part B incurred in the cessation of a business,
164: Schedule 11—Banded rates of depreciation
1: In the shoulder reference in schedule 11 EE 25 EE 25E
2: Subsection (1)
165: Schedule 13—Months for payment of provisional tax and terminal tax
1: In columns A to F of schedule 13, part A 28 Apr 7 May 2007-10-01 Schedule 13
2: Subsection (1)
166: Schedule 22A—Identified policy changes
In schedule 22A FC 21 The recharacterisation of amounts derived from New Zealand , from the listed activities, does not apply to a New Zealand company that is under the control of non-residents.
167: Schedule 23—Comparative tables of old and new provisions
In schedule 23
a: in the third column of part A
i: the entry corresponding to EG 17(1) is replaced by EE 33(1)–(3)
ii: the entry corresponding to EG 17(2) is replaced by EE 33(4)
iii: the entry corresponding to EG 17(3) is replaced by EE 33(4)
iv: the entry corresponding to EG 17(3B) is replaced by EE 34(1)
v: the entry corresponding to EG 17(4) is replaced by EE 33(5)
vi: the entry corresponding to EG 17(5) is replaced by EE 33(1)
vii: the entry corresponding to EG 17(8) is replaced by EE 33(1), (3)-(5), EE 35
b: the entry in part A
i: an entry corresponding to GD 9(1) in which the third column is CB 13
ii: an entry corresponding to GD 9(2) in which the third column is omitted
c: in the second column of part B
i: the entry corresponding to EE 33 is replaced by EG 17(1)–(5), (8)
ii: the entry corresponding to EE 34 is replaced by EG 17(3B), FE 5(2)
2: Amendments to Tax Administration Act 1994
168: Tax Administration Act 1994
This Part amends the Tax Administration Act 1994
169: Interpretation
1: In subsection 3(1) fringe benefit full and complete inspection
a: includes use as evidence in court proceedings:
b: does not include removal to make copies under section 16B .
2: In subsection 3(1) judicial officer and section 16C that section
3: In subsection 3(1)
a: the definition of new return date
b: the definition of original return date
c: the definition of return date
170: Giving of notices by Commissioner
Section 14(9)
9: A notice given by post is treated as having been given at the time the notice would have been delivered in the ordinary course of the post.
171: Giving of notices to Commissioner
Section 14B(8)
8: A notice given by post is treated as having been given at the time the notice would have been delivered in the ordinary course of the post.
172: Giving of notices to other persons
Section 14C(8)
8: A notice given by post is treated as having been given at the time the notice would have been delivered in the ordinary course of the post.
173: New section 16C inserted
After section 16B
16C: Power to remove and retain documents for inspection
1: The Commissioner, an authorised officer, or a person accompanying the Commissioner or the authorised officer may remove books or documents from a place accessed under section 16
a: the consent of an occupier:
b: a warrant issued under subsection (2)
2: A judicial officer may issue, to the Commissioner or an authorised officer, a warrant for the purpose of removing books or documents from a place and retaining them for a full and complete inspection if, on written application made on oath, the judicial officer is satisfied that the exercise by the Commissioner or an authorised officer of his or her functions under section 16
3: Every warrant issued under subsection (2) section 16(5)(a) to (d)
4: Every person exercising the power to remove and retain conferred by a warrant issued under subsection (2)
a: on first entering the place; and
b: whenever subsequently reasonably required to do so.
5: The owner of a book or document that is removed under this section is entitled to obtain a copy of the book or document at the premises to which the book or document is removed—
a: at the time the book or document is removed to the premises:
b: at reasonable times subsequently.
6: Books or documents retained under this section may be retained for so long as is necessary for a full and complete inspection.
7: The Commissioner or an officer of the Department authorised by the Commissioner may make copies of books or documents retained under this section, and a copy of a book or document certified by or on behalf of the Commissioner is admissible in evidence in court as if it were the original.
8: In this section, judicial officer means a judicial officer as defined in section 16(7)
174: Claim that book or document is tax advice document
In section 20D(4)(a) 1 or both of sections 16 and 16B section 16 section 16 sections 16B and 16C
175: Person must disclose tax contextual information from tax advice document
In section 20F(2)(a) 1 or both of sections 16 and 16B section 16 section 16 sections 16B and 16C
176: New section 28B inserted
After section 28
28B: Investor advising portfolio tax rate entity of portfolio investor rate
An investor who notifies a portfolio tax rate entity that the prescribed investor rate for the investor and a portfolio calculation period is less than 33% must provide the investor's tax file number to the entity at the time of the notice . 2007-10-01 Section 28B
177: Shareholder dividend statement to be provided by company
1: In section 29(1C)(b) emigration date date of the emigration time
2: Subsection (1)
178: Statement to share supplier when share user makes replacement payment under share-lending arrangement
Section 30B(d) (h)
179: Maori authority to give notice of amounts distributed
In section 31(1)(e) section NF 8B section NF 8A
180: New section 31B inserted
After section 31
31B: Portfolio tax rate entity to give statement to investors and request information
1: A portfolio tax rate entity must give to a zero-rated portfolio investor in the entity a notice giving information that the Commissioner considers relevant,—
a: for each portfolio calculation period, if the portfolio calculation period is more than a day; or
b: for each income year, if the portfolio calculation period is a day.
2: A portfolio tax rate entity must give to an investor in the entity who has a portfolio investor exit period a notice giving information that the Commissioner considers relevant,—
a: for each portfolio calculation period in which the portfolio exit period falls, if the portfolio calculation period is more than a day; or
b: for each income year in which the portfolio exit period falls, if the portfolio calculation period is a day.
3: If subsections (1) and (2)
a: for each income year; and
b: by the 30 June after the end of the income year.
4: A portfolio tax rate entity must at least once in each income year give a notice to an investor in the entity requesting that the investor provide the entity with the investor's prescribed investor rate. 2007-10-01 Section 31B
181: Certification requirements for withdrawals subject to section CS 1 of Income Tax Act 2004
Section 32B(1)(b)
b: The amount of specified superannuation contributions that were subject to specified superannuation contribution withholding tax at the rate specified in schedule 1, part A, clause 10(a) of the Income Tax Act 2004 clause 10(a) .
182: Annual returns of income
In section 33(1) or a portfolio tax rate entity section 33A 2007-10-01 Section 33(1)
183: Annual returns of income not required
In section 33A(l)(a) subparagraph (i) gross income assessable income
184: New section 36AB inserted
After section 36A
36AB: Electronic format of returns by portfolio investment entity
1: The Commissioner must prescribe one or more electronic formats in which a return required under section 57B
2: A format prescribed under subsection (1) 2007-10-01 Section 36AB
185: Returns to annual balance date
After section 38(1)
1B: A portfolio tax rate entity that does not make payments of tax under section HL 22 of the Income Tax Act 2004 subsection (1) 2007-10-01 Section 38(1B)
186: Non-resident withholding tax deduction certificates and annual reconciliations
1: In section 49(4B) paragraph (a) emigration date date of the emigration time
2: In section 49(4C)(c) emigration date date of the emigration time
3: Subsections (1) (2)
187: Resident withholding tax deduction reconciliation statements
1: In section 51(5B) emigration date emigration time
2: In section 51(5C)(c) emigration date date of the emigration time
3: Subsections (1) (2)
188: New section 57B inserted
After section 57
57B: Portfolio tax rate entities and portfolio investor proxies to make returns, file annual reconciliation statement
1: A person who is a portfolio tax rate entity or portfolio investor proxy in a tax year and who has not made an election under section HL 22 or HL 23 of the Income Tax Act 2004 subsection (4)
a: for a portfolio calculation period in the tax year; and
b: by the end of the month beginning from the end of the month in which the portfolio calculation period ends.
2: A person who is a portfolio tax rate entity or portfolio investor proxy in a tax year and who has made an election under section HL 22 of the Income Tax Act 2004
3: A person who is a portfolio tax rate entity or portfolio investor proxy in a tax year and who has made an election under section HL 23 of the Income Tax Act 2004 subsection (4)
a: for an investor with a portfolio investor exit period in the tax year,—
i: for the portfolio investor exit period; and
ii: by the end of the month beginning from the end of the month in which the portfolio investor exit period ends; and
b: for the investors who hold portfolio investor interests at the end of the tax year,—
i: for the tax year; and
ii: by the end of the month beginning from the end of the tax year.
4: The responsibilities of a person for each period are to—
a: file a return in the prescribed form showing—
i: the amount of the portfolio entity tax liability of the person for the period; and
ii: if the person has not made an election under section HL 22 or HL 23 of the Income Tax Act 2004 section HL 21(5) of that Act
iii: further information that the Commissioner considers relevant; and
b: pay an amount of income tax equal to the portfolio entity tax liability of the person for the period.
5: A person who is a portfolio tax rate entity or portfolio investor proxy in a tax year must file for the tax year a return in the prescribed form showing—
a: the income tax paid by the person for the tax year; and
b: further information that the Commissioner considers relevant.
6: A person required by subsection (5)
a: by 30 June of the calendar year in which the tax year ends, if the person is a portfolio tax rate entity or portfolio investor proxy at the end of the tax year; or
b: by the end of the second month following the month in which the entity ceases to be a portfolio tax rate entity or portfolio investor proxy, if the person ceases to be a portfolio tax rate entity or portfolio investor proxy in the tax year. 2007-10-01 Section 57B
189: Officers to maintain secrecy
After section 81(4)(mb)
mc: publishing the name of a company that has given the Commissioner a notice under section EX 33B(1)(b) or (2)(b) of the Income Tax Act 2004 .
190: Notices of proposed adjustment required to be issued by Commissioner
In section 89C(eb) left New Zealand and may have
191: Taxpayers and others with standing may issue notices of proposed adjustment
1: In section 89D(2D) section 16(3) section 16(6)
2: Subsection (1)
192: Determination on economic rate
Section 91AAF(4)(b)
b: is—
i: reacquired, after the date on which the new determination is issued, by the person who disposed of it before the date on which the new determination is issued:
ii: an item of property to which section EE 25B, EE 25C, EE 25E, or EZ 21B of the Income Tax Act 2004
193: New heading and section 91AAO inserted
After section 91AAN Determinations relating to calculation of FIF income using fair dividend rate method
91AAO: Determination on type of interest in FIF and use of fair dividend rate method
1: For the purposes of section EX 40 of the Income Tax Act 2004
a: a type of attributing interest in a FIF for which a person may use the fair dividend rate method to calculate FIF income from the interest; or
b: a type of attributing interest in a FIF for which a person may not use the fair dividend rate method to calculate FIF income from the interest.
2: In making a determination, the Commissioner must take into account the economic relationships created by the arrangement and the principles that—
a: the fair dividend rate method may be used to calculate FIF income from an arrangement giving an investor an interest in the business profits and losses of a FIF:
b: the fair dividend rate method should not be used to calculate FIF income from an arrangement giving an investor a return that is not dependent on the business profits and losses of a FIF.
3: A determination made by the Commissioner under this section may be made for tax years that are specified in the determination but may not apply to a taxpayer for a date before the date of the determination unless the taxpayer would, in the absence of the determination, be subject to a shortfall penalty relating to the date and a tax position that is affected by the determination.
4: A determination may provide for the extension, limitation, variation, cancellation, or revocation of an earlier determination.
5: A determination made by the Commissioner under this section must be published in the Gazette
194: Extension of time bars
1: In section 108B(2) A waiver under subsection (1) An agreement under subsection (1)(a)
2: After section 108B(2)
2B: A notice under subsection (1)(b) subsection (1)(a)
195: Definitions
In section 120C(1) date interest starts paragraph (f)
f: for unpaid tax, being terminal tax for the tax year in which a taxpayer dies, the due date for the deceased person's terminal tax, if—
i: each instalment of provisional tax payable by the deceased person for that tax year is paid by the due date under section MB 5
ii: the terminal tax payable by the deceased person for that tax year is paid by the due date under section MC 1 .
196: Example:
Section 120KC
1: The example after section 120KC 2007-10-01 Section 120KC
2: Subsection (1)
197: Example:
Section 120KD
1: The example after section 120KD 2007-10-01 Section 120KD
2: Subsection (1)
198: Late filing penalties
After section 139A(2)(a)(iii)
iiib: a return required to he furnished under section 57B . 2007-10-01 Section 139A(2)(a)(iiib)
199: Non-electronic filing penalty
1: After section 139AA(1)(a)
ab: a portfolio investment entity; and . 2007-10-01 Section 139AA(1)(ab)
2: Section 139AA(2)
2: A person who is an employer, a portfolio investment entity, a portfolio investor proxy, or a PAYE intermediary is liable to a non-electronic filing penalty if the person furnishes a return required to be in electronic format in a format that is not prescribed. 2007-10-01 Section 139AA(2)
3: Amendments to other Acts and regulations
Income Tax Act 1994
200: Income Tax Act 1994
Sections 201 to 208 Income Tax Act 1994
201: What constitutes an interest in a foreign investment fund
1: After section CG 15(2)(c)
cb: if the person is a natural person and, at the time, the FIF is a foreign superannuation scheme, constituted in Australia, that is—
i: an approved deposit fund as defined in section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust)
ii: an exempt public sector superannuation scheme as defined in section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust)
iii: a regulated superannuation fund as defined in section 19 of the Superannuation Industry (Supervision) Act 1993 (Aust)
iv: a retirement savings account as defined in section 8 of the Retirement Savings Accounts Act 1997 (Aust) .
2: Subsection (1)
a: the 1994-95 income year, if the corresponding accounting year for the person ends on or after 1 April 1995:
b: the 1995-96 and later income years.
202: New section CZ 7 added
1: After section CZ 6
CZ 7: Geothermal wells between 31 March 2003 and 17 May 2006
1: This section applies to a taxpayer's geothermal well, if—
a: the well is—
i: both started and completed between 31 March 2003 and 17 May 2006:
ii: acquired between 31 March 2003 and 17 May 2006; and
b: the taxpayer—
i: uses the well, or has the well available for use, after the end of the well's geothermal energy proving period, in deriving gross income or carrying on a business for the purpose of deriving gross income:
ii: disposes of the well.
2: The taxpayer's gross income, for the first income year in which this section applies, includes an amount equal to,—
a: if subsection (1)(b)(i) section DZ 7
b: if subsection (1)(b)(ii)
i: the amount derived from disposing of the well; and
ii: the amount of a deduction that the taxpayer is allowed for the well under section DZ 7
2: Subsection (1)
203: Expenditure to prevent or combat pollution of environment
1: Section DJ 10(1)
1: If a taxpayer engaged in any business in New Zealand (other than a farming or agricultural business) has incurred in that business any expenditure in the construction on land in New Zealand of earthworks, ponds, settling tanks, or other similar improvements primarily for the purpose of treating waste in order to prevent or combat pollution of the environment (not being expenditure in respect of which a deduction, whether by way of depreciation or otherwise, is allowed under any other provision of this Act or the Income Tax Act 1976
2: Subsection (1)
a: the taxpayer, before 16 November 2004,—
i: provides a return:
ii: issues a notice of proposed adjustment:
iii: issues a response notice:
iv: requests a re-assessment; and
b: the income year is an income year to which the return, notice or request described in paragraph (a)(i) to (iv)
c: the correctness of the tax position adopted by the taxpayer in the return, notice or request described in paragraph (a)(i) to (iv) industrial waste section DJ 10
d: the taxpayer's interpretation of industrial waste section DJ 10 subsection (1)
3: If subsection (1) subsection (2) subsection (1)
204: New section DZ 7 added
1: After section DZ 6
DZ 7: Geothermal wells between 31 March 2003 and 17 May 2006
1: This section applies to a taxpayer's geothermal well, if—
a: the well's geothermal energy proving period ends between 31 March 2003 and 17 May 2006; and
b: the well is—
i: both started and completed between 31 March 2003 and 17 May 2006:
ii: acquired between 31 March 2003 and 17 May 2006; and
c: a deduction for expenditure on the well is not allowed under any provision except this one.
2: The taxpayer is allowed a deduction, for the income year in which the well's geothermal energy proving period ends, for expenditure incurred on the well.
2: Subsection (1)
205: Distributions by Maori authority
1: In section HI 4(3) ME 5 ME 35
2: Subsection (1)
206: Limit on refunds and allocations of tax
In section MD 2(4) after the date of payment of the first instalment of provisional tax for that income year after a credit is made to that company's imputation credit account for amounts that have satisfied the company's income tax liability for that income year,
207: Definitions
1: This section amends section OB 1
2: In the definition of eligible company
a: in the words before paragraph (a) , and is either incorporated in New Zealand or carrying on a business in New Zealand through a fixed establishment, New Zealand
b: in paragraph (c) company: company; or
d: by the law of another country or territory, liable to income tax in that country or territory by reason of domicile, residence, or place of incorporation .
3: After the definition of geophysical prospecting geothermal energy proving period
a: starting with the completion or acquisition of the well; and
b: excluding the case of the taxpayer disposing of the well to another person, ending when the well, for the foreseeable future, is not intended, and cannot reasonably be expected, to be used or available for use in—
i: deriving gross income:
ii: carrying on a business for the purpose of deriving gross income geothermal well .
4: The definition of specified lease specified lease
a: the lease is entered in the period starting on 6 August 1982 and ending on 19 May 1999 and the lease has a guaranteed residual value, or has a lease term that is more than 36 consecutive months, or has a lease term that is the economic life of the asset because the Commissioner considers that the asset has an economic life of less than 36 months, and—
i: the lessee becomes the owner of the lease asset at the end of the term of the lease:
ii: the lessee has the option to purchase the lease asset at the end of the term of the lease at a price that the Commissioner considers will be significantly lower than the market value of the lease asset at the end of the lease term:
iii: the total of all lease payments and the guaranteed residual value is more than or equal to, or to a small extent less than, the cost price of the lease asset:
iv: the lessor and the lessee agree that the lessee is liable for the payment of all, or nearly all, expenditure incurred for the costs of repair and maintenance and any other incidental costs arising during the lease term for the use of the lease asset:
b: the lease is entered in the period starting on 6 August 1982 and ending on 19 May 1999 and the lessee acquires ownership of the asset by any means, whether from the lessor or another person:
c: the lease is entered in the period starting on 28 October 1983 and ending on 19 May 1999 and—
i: a person other than the lessee acquires the lease asset; and
ii: the lessee and the person who acquires the lease asset are associated .
5: Subsection (2)
6: If subsection (2) subsection (5) subsection (2)
7: Subsection (3)
208: Modifications to voting and market value interests for application of continuity provisions to reverse takeover
1: In section OD 5AA(2)(e) are treated under section OD 5(6)(b) are held by 1 or more persons
2: In section OD 5AA(2)(f)
a: in subparagraph (i) that the initial owners hold initial parent
b: in subparagraph (ii) held the total ownership held the ownership
3: Subsections (1) (2) Income Tax Act 1976
209: What constitutes an interest in a foreign investment fund
1: After section 245RA(2)(c) of the Income Tax Act 1976
cb: if the person is a natural person and, at the time, the FIF is a foreign superannuation scheme, constituted in Australia, that is—
i: an approved deposit fund as defined in section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust)
ii: an exempt public sector superannuation scheme as defined in section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust)
iii: a regulated superannuation fund as defined in section 19 of the Superannuation Industry (Supervision) Act 1993 (Aust) .
2: Subsection (1)
a: the 1993-94 income year, for a taxpayer whose corresponding non-standard accounting year ends after 30 November 1993:
b: the 1994-95 income years, for a taxpayer whose corresponding non-standard accounting year ends before 1 April 1995. Goods and Services Tax Act 1985
210: Goods and Services Tax Act 1985
Sections 211 to 218 Goods and Services Tax Act 1985
211: Meaning of associated persons
In section 2A(1)
a: paragraph (c)(iv)
b: after paragraph (c)
cb: a trustee of a trust and another person ( person A
i: person A is associated with another person (the relative paragraph (c)
ii: the relative is associated with the trustee under paragraph (f) .
212: Meaning of term financial services
In section 3(1)(1) thereon. thereon:
m: the investment in an entity, if—
i: the investment is in an equity security equal to or greater than 10% of all equity securities issued by the entity or in a participatory security equal to or greater than 10% of all participatory securities issued by the entity; and
ii: the investment allows the investor, or a person acting on behalf of the investor, to influence the management of the business of the entity:
n: the evaluation by an investor of an investment referred to in paragraph (m)
213: Value of supply of goods and services
1: Section 10(7)
7: If goods and services are treated by section 21I(1)
a: an amount equal to the taxable value of the fringe benefit as determined by sections CX 18 and ND 1S to ND 1V of the Income Tax Act 2004 paragraph (b)
b: nil, if the person would not have a deduction under section 20(3) paragraph (a)
2: Subsection (1)
214: Changes in taxable periods
1: After section 15C(3)
3B: A person to whom section 15(1)(a) or (b)
3C: A person to whom section 15(1)(c) section 15(4) 2007-10-01 Section 15C(3B) Section 15C(3C)
2: Subsection (1)
a: a taxable period that begins on or after the beginning of the registered person's income year corresponding to the 2008–09 tax year, if the registered person derives assessable income in that income year:
b: a taxable period that begins on or after 1 April 2008, if paragraph (a)
215: When change in taxable period takes effect
1: In section 15D(1)(a) 15B(5)(b), or 15C(1) or (2) 15B(5)(b) or 15C 2007-10-01 Section 15D(1)(a)
2: Subsection (1)
a: a taxable period that begins on or after the beginning of the registered person's income year corresponding to the 2008–09 tax year, if the registered person derives assessable income in that income year:
b: a taxable period that begins on or after 1 April 2008, if paragraph (a)
216: Taxable period returns
1: Section 16(2)(a)
a: the 28th of the month following the end of the taxable period, if paragraph (b) or (c)
b: the 15th day of January, if the month following the end of the taxable period is December; or
c: the 7th day of May, if the month following the end of the taxable period is April.
2: Section 16(5)(a)
a: the 28th of the month following the end of the taxable period, if paragraph (b) or (c)
b: the 15th day of January, if the month following the end of the taxable period is December; or
c: the 7th day of May, if the month following the end of the taxable period is April.
3: Subsections (1) (2)
217: Election that sections 11A(1)(q) and (r) and 20C apply
In section 20F(1) registered person person
218: Group of companies
1: Section 55(1)
1: For the purposes of this Act, 2 or more companies (the companies section IG 1 of the Income Tax Act 1994
a: each of the companies is a registered person:
b: the total value of taxable supplies made by the companies, in any 12-month period which includes that time, to persons other than the companies, is at least 75% of the total value of supplies made by the companies to persons other than the companies in that period.
2: In section 55(1) subsection (1) Income Tax Act 1994 Income Tax Act 2004
3: Section 55(3)
3: In any application made under subsection (2) of this section
a: one of the companies shall be nominated to be the representative member; and
b: the company nominated under paragraph (a)
4: In section 55(4)
a: in paragraph (d) section,— section.
b: the words after paragraph (d)
5: After section 55(4)
4AA: The Commissioner shall grant an application made under subsection (4) of this section
a: the beginning of such taxable period as is determined by the Commissioner, unless paragraph (b)
b: the beginning of the taxable period in which the relevant company is first eligible, under subsection (1)(b) of this section subsection (4)(a) of this section
6: In section 55(4) subsection (4)
a: in paragraph (d) section. section,—
b: after paragraph (d) and the Commissioner shall grant the application from the beginning of such taxable period as is determined by the Commissioner.
7: Section 55(4AA), as inserted by subsection (5) Companies Act 1993
219: Dividends
In section 53(2) Companies Act 1993 or is required, for a portfolio tax rate entity, by section HL 8 of the Income Tax Act 2004 2007-10-01 Section 53(2) KiwiSaver Act 2006
220: KiwiSaver Act 2006
Sections 221 to 227 KiwiSaver Act 2006
221: Interpretation
In section 4(1) Commissioner complying superannuation fund section OB 1 of the Income Tax Act 2004 .
222: Heading to Part 2, subpart 3
In the heading to Part 2, subpart 3 KiwiSaver schemes KiwiSaver schemes and between complying superannuation fund and KiwiSaver scheme
223: Application
Section 54
54: Application
1: Sections 55 and 56 voluntary transfer
2: Sections 57 to 59 involuntary transfer
224: People may transfer between KiwiSaver schemes
1: In the heading to section 55 KiwiSaver schemes KiwiSaver schemes and between complying superannuation fund and KiwiSaver scheme
2: In section 55(1) one KiwiSaver scheme (an old scheme a KiwiSaver scheme or a complying superannuation fund (an old scheme
225: Notification of transfers and requirement to transfer funds and information
In section 56(3)(c)(i) KiwiSaver scheme KiwiSaver scheme, if the old scheme is a KiwiSaver scheme
226: Involuntary transfers
In section 57(1)
a: in the words before the paragraphs, transfer KiwiSaver schemes transfer KiwiSaver schemes or from a complying superannuation fund to a KiwiSaver scheme
b: in paragraph (c) section 210(2) section 210(2)
c: the following is added:
d: the Commissioner has received notice in accordance with paragraph (h) section OB 1 of the Income Tax Act 2004
227: Schedule 1—KiwiSaver scheme rules
In schedule 1, clause 4(2)
a: in paragraph (b) years. years; or
b: the following is added:
c: the date on which the member has been a member of a complying superannuation fund (or of a complying superannuation fund and a KiwiSaver scheme) for 5 years. Public Trust Act 2001
228: Public Trust Act 2001
Sections 229 230 Public Trust Act 2001
229: Interpretation
In section 4 owner portfolio investment entity Income Tax Act 2004 . 2007-10-01 Section 4 portfolio investment entity
230: New section 72B inserted
After section 72
72B: Powers to adjust interest in trust property of Fund that is portfolio investment entity
Where any investments and funds comprising a Group Investment Fund are employed in an activity that Public Trust is empowered or authorised to carry on as a portfolio investment entity, Public Trust may adjust the interests of the beneficiaries in the investments and funds in the way required by section HL 7 of the Income Tax Act 2004 . 2007-10-01 Section 72B Securities Act 1978
231: Securities Act 1978
Sections 232 233 Securities Act 1978
232: Interpretation
In section 2 person portfolio investment entity Income Tax Act 2004 portfolio investment interest Income Tax Act 2004 . 2007-10-01 Section 4 portfolio investment entity Section 4 portfolio investment interest
233: Exemptions from this Act
After section 5(4)
4A: Nothing in sections 33, 37, and 37A(1)(a) of this Act section HL 7(3) of the Income Tax Act 2004
4B: The exemption in subsection (4A) section HL 7(4) of the Income Tax Act 2004 2007-10-01 Section 5(4A) Section 5(4B) Superannuation Schemes Act 1989
234: Superannuation Schemes Act 1989
Sections 235 to 238 Superannuation Schemes Act 1989
235: Interpretation
In section 2(1) benefit complying fund rules section OB 1 of the Income Tax Act 2004 .
236: Disclosure of information to Government Actuary
In section 18A(2)
a: in paragraph (b) inadequate. inadequate; or
b: the following is added:
c: for a registered scheme approved as a complying superannuation fund for the purposes of the Income Tax Act 2004 section 35(1)(a) to (c)
237: New sections 34 to 36 added
The following is added to Part 2
34: Complying superannuation funds
1: A person may apply to the Government Actuary for approval of a registered scheme as a complying superannuation fund for the purposes of the Income Tax Act 2004
2: The application must be accompanied by all information relevant to the Government Actuary dealing with the application under section 35
35: Dealing with applications for complying superannuation funds
1: The Government Actuary must complete consideration of whether or not the relevant registered scheme is approved as a complying superannuation fund, within 28 days after receiving an application from a person under section 34
a: the registered scheme and any relevant participation agreement evidence rules that subject relevant contributions to complying fund rules; and
b: the registered scheme is a defined contribution scheme, as defined in section 4(1) of the KiwiSaver Act 2006
c: the registered scheme has at least 20 members, treating all interests in the registered scheme or account held by persons associated under section OD 8(3) of the Income Tax Act 2004
d: the registered scheme is registered on or before 1 July 2007; and
e: any relevant participation agreement is entered into on or before 1 July 2007.
2: The Government Actuary must notify the person whether or not the relevant registered scheme is approved as a complying superannuation fund for the purposes of the Income Tax Act 2004 subsection (1)
3: If the relevant registered scheme is approved as a complying superannuation fund for the purposes of the Income Tax Act 2004 subsection (2)
4: Approval notified under subsections (2) and (3) subsection (1)
36: Revocation of approval
1: If the Government Actuary has reasonable cause to believe that a registered scheme that is approved as a complying superannuation fund no longer meets the requirements in section 35(1)(a) to (c) schedule 2
2: The Government Actuary must, as soon as practicable after revoking approval under subsection (1)
a: the registered scheme; and
b: the person that originally applied for approval under section 34
c: the Commissioner of Inland Revenue.
3: Revocation notified under subsection (2) subsection (1)
4: A registered scheme that is notified that approval is revoked must immediately notify that revocation to each member who may be affected, and to their employers. At the same time, the registered scheme must notify the Commissioner of each member who may be affected, and of their employers.
238: Schedule 2—Matters to be specified in annual report
In schedule 2 1978. 1978:
o: If the registered scheme is a complying superannuation fund for the purposes of the Income Tax Act 2004
i: the market value of assets subject to complying fund rules; and
ii: the number of members to which the assets relate; and
iii: the value of withdrawals subject to complying fund rules. Trustee Act 1956
239: Trustee Act 1956
Sections 240 241 Trustee Act 1956
240: Interpretation and application
In section 2 possession portfolio investment entity Income Tax Act 2004 . 2007-10-01 Section 2 portfolio investment entity
241: New heading and new section 42E inserted
After section 42D Special powers in respect of portfolio investment entities
42E: Power to adjust interests in trust property of portfolio investment entity
Where any property is employed in an activity that the trustee is empowered or authorised to carry on as a portfolio investment entity, the trustee may adjust the interests of the beneficiaries in the property in the way required by section HL 7 of the Income Tax Act 2004 Superannuation Schemes Act 1989 . 2007-10-01 Section 42E Trustee Companies Act 1967
242: Trustee Companies Act 1967
Sections 243 244 Trustee Companies Act 1967
243: Interpretation
In section 2 person portfolio investment entity Income Tax Act 2004 . 2007-10-01 Section 2 portfolio investment entity
244: New section 33B inserted
After section 33
33B: Powers of trustee company or manager to adjust interest in trust property of Fund that is portfolio investment entity
Where any investments and funds comprising a Group Investment Fund are employed in an activity that the trustee company is empowered or authorised to carry on as a portfolio investment entity, the trustee company or the manager of the Fund may adjust the interests of the beneficiaries in the property in the way required by section HL 7 of the Income Tax Act 2004 . 2007-10-01 Section 33B Unit Trusts Act 1960
245: Unit Trusts Act 1960
Sections 246 247 Unit Trusts Act 1960
246: Interpretation
In section 2 nominee portfolio investment entity Income Tax Act 2004 . 2007-10-01 Section 2 portfolio investment entity
247: New section 12A inserted
After section 12
12A: Implied provision in trust deed of portfolio investment entity
1: The provision in subsection (2)
2: Where any money, investments or other property of the unit trust is employed in an activity carried on as a portfolio investment entity, the manager may adjust the interests in the unit trust of the beneficiaries in the way required by section HL 7 of the Income Tax Act 2004 2007-10-01 Section 12A Tax Administration (Form of Warrant) Regulations 2003
248: Tax Administration (Form of Warrant) Regulations 2003
Sections 249 to 251 Tax Administration (Form of Warrant) Regulations 2003
249: Warrant to enter private dwelling
In regulation 4 the Schedule schedule 1
250: New regulation 4B
After regulation 4
4B: Warrant to remove and retain books or documents
A warrant issued under section 16C of the Tax Administration Act 1994 schedule 2 .
251: New schedule 2 inserted
After the schedule schedule