Part C
Income
Income from holding property (excluding equity)
CC 7Consideration other than in money
This section applies when—
- a lender provides money to a borrower for use in a business that the borrower carries on in New Zealand; and
- the borrower provides to the lender, as some or all of the consideration, a tangible or intangible benefit that—
- is not interest; and
- may or may not be relief from an obligation; and
- may or may not be convertible into money; and
- is not interest; and
- the borrowing is a commercial transaction under which the borrower would have been liable to pay interest at the current commercial rate, given the nature and term of the loan, if the borrower had not provided the benefit, whether or not the contract between the borrower and the lender provides for the payment of interest if the benefit is not provided.
The amount described in subsection (3) is income of the lender.
The amount is the interest that the borrower would have been liable to pay if the lender had lent the money to the borrower in consideration of the payment of interest at the current commercial rate, given the nature and term of the loan, reduced by the amount of any interest that the borrower pays.
Compare
- 2004 No 35 s CC 7