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CW 5: Payments of interest: post-war credits
or “UK post-war credit interest payments are tax-free in New Zealand”
You could also call this:

“Tax exemption rules for interest on some farm mortgages”

You might get some special treatment on interest from farm mortgages. If someone sells you a farm and you get a loan to buy it, half of the interest you earn from that mortgage might not be taxed. But there are some rules:

The Rural Banking and Finance Corporation of New Zealand needs to approve the mortgage. They also have to tell the tax office about it.

This special rule doesn’t apply to everyone. You can’t use it if you’re not living in New Zealand, if you’re a company, a Maori authority, a government organisation, certain types of trusts, or an unincorporated group.

If you do get this tax break on your interest, you can’t also claim a tax credit for it under sections LZ 6 to LZ 8. Those sections are about interest on home vendor mortgages.

Remember, this is just a simple explanation of the law. If you need to know more, it’s a good idea to ask a grown-up or a professional for help.

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Next up: CW 7: Foreign-sourced interest

or “Tax exemption for overseas interest income for non-residents”
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Part C Income
Exempt income

CW 6Payments of interest: farm mortgages

  1. Fifty percent of the interest that a person derives from a mortgage securing a loan made by a seller of a farm is exempt income, if—

  2. the Rural Banking and Finance Corporation of New Zealand approves the mortgage; and
    1. the Corporation gives the Commissioner notice of the approval and each variation.

      1. This section does not apply if the person is—

      2. an absentee; or
        1. a company; or
          1. a Maori authority; or
            1. a public authority; or
              1. a trustee liable for income tax under subpart HC (Trusts) and section HZ 2 (Trusts that may become complying trusts); or
                1. an unincorporated body.

                  1. A person who derives interest that is exempt income under this section is not entitled to a tax credit for the interest under sections LZ 6 to LZ 8 (which relate to interest on home vendor mortgages).

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