Telecommunications Act 2001

Structural separation of Telecom - Taxation consequences of structural separation

69XW: Revenue account property

You could also call this:

"What happens to a Telecom company's property when it splits into different parts?"

Illustration for Telecommunications Act 2001

When a Telecom company separates into different parts, you need to know what happens to its property. For tax purposes, the property is treated as if it was sold by the Telecom company and bought by the Chorus company for a certain amount. This amount is called the tax book value, which you can find out more about in the Income Tax Act 2007. The tax book value is calculated differently depending on what kind of property it is. If it's trading stock or a certain type of financial arrangement, its value is determined by a specific section of the Income Tax Act 2007. For other types of property, its value is the amount that the Telecom company can claim as a deduction for tax purposes. Some terms used here, like excepted financial arrangement, revenue account property, and trading stock, have the same meaning as in the Income Tax Act 2007.

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This page was last updated on 8 October 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4187739.

Topics:

Money and consumer rights > TaxesBusiness > Industry rules

69XV: Vesting of designated assets and liabilities, or

"Transferring assets to Chorus without paying extra taxes"

69XX: Leased assets, or

"Tax rules for telecom companies that lease things"

Part 2AStructural separation of Telecom
Taxation consequences of structural separation

69XWRevenue account property

For the purposes of the Income Tax Act 2007, for a designated asset or liability that is revenue account property (the property), the property is treated as being disposed of by the relevant Telecom company and acquired by the relevant Chorus company for an amount equal to the property's tax book value.
In this section, tax book value means,—
for the property, if it is trading stock or an excepted financial arrangement acquired by the relevant Telecom company before the vesting year, the opening value of the property under section DB 49 of the Income Tax Act 2007 for that Telecom company for the vesting year:
for the property, if paragraph (a) does not apply, the amount of expenditure or loss for which the relevant Telecom company is allowed a deduction in the vesting year as a result of the disposal.

In this section, excepted financial arrangement, revenue account property, and trading stock have the same meaning as in the Income Tax Act 2007.

Notes

Section 69XW: inserted, on 30 November 2011 (being the date of separation day, and an Order in Council (SR 2011/302) having been made under section 36), by section 51 of the Telecommunications (TSO, Broadband, and Other Matters) Amendment Act 2011 (2011 No 27).