Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Adjustments

CH 9: Interest apportionment: excess debt entity

You could also call this:

“Splitting up interest costs when you have a lot of debt”

If you have a lot of debt, you might be called an ‘excess debt entity’. When this happens, you need to split up your interest costs in a special way. This is called ‘apportioning’ your interest.

There’s a rule called section FE 6 that tells you how to do this. It explains how to work out a certain amount of money.

Once you’ve worked out this amount using section FE 6(2), you need to treat it as income. This means you have to include it as part of your income for the year when you do your taxes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512867.

Topics:
Money and consumer rights > Taxes
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Part C Income
Adjustments

CH 9Interest apportionment: excess debt entity

  1. This section applies when an excess debt entity is required under section FE 6 (Apportionment of interest by excess debt entity) to apportion its interest expenditure.

  2. The amount calculated under section FE 6(2) is treated as income of the excess debt entity for the income year.

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