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Income Tax Act 2007

Income - Income from business or trade-like activities - Exclusion for investment land

CB 33: Amounts derived by mutual associations

You could also call this:

“Income from mutual deals between an association and its members is taxable”

When an association makes a deal with its members, or with members and non-members, as described in section HE 2, it’s called a mutual transaction. If the association gets money from this deal that would normally be income, it’s still counted as income for the association. This is true even if the deal’s mutual nature would usually mean it’s not income. The law treats this money as income for the association, no matter what.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512501.

Topics:

Money and consumer rights > Taxes

CB 32C: Dividend income for first year of look-through company, or

“How to calculate dividend income when a company becomes a look-through company”

CB 34: Amounts derived by members from mutual associations, or

“How rebates from mutual associations may count as income”

Part C Income
Income from business or trade-like activities: Exclusion for investment land

CB 33Amounts derived by mutual associations

This section applies when an association enters into a transaction of a kind described in section HE 2 (Classes of mutual transaction) with—
1 or more members; or
1 or more members along with 1 or more persons who are not members of the association.

If the association derives from the transaction an amount that would, in the absence of this subsection, be income under a provision in this Part but for the mutual character of the transaction, the amount is income of the association.

Compare

2004 No 35 s HF 1(1)

Notes

Section CB 33(2) heading: substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 5(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section CB 33(2): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 5(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).