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Income Tax Act 2007

Income - Excluded income - Fringe benefits

CX 11: Employment-related loans: loans by life insurers

You could also call this:

“Loans from life insurers linked to your job and insurance policy”

You can get a benefit that’s treated as a loan from your job if a life insurance company gives you or someone connected to you a loan. This happens when you have a life insurance policy with them in New Zealand. The loan is given to you because you have the policy, or the interest on the loan changes based on you having the policy.

When this happens, the rules about fringe benefits (extras you get from your job) treat the life insurance company like your employer and you (or the person connected to you) like an employee.

A life insurer can be the company that provides your life insurance policy. It can also be a company connected to that insurer or a company that has an agreement with the insurer about giving out loans.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513352.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Banking and loans
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Part C Income
Excluded income: Fringe benefits

CX 11Employment-related loans: loans by life insurers

  1. A life insurer provides a benefit that is treated as an employment-related loan if—

  2. the life insurer makes a loan to a person who holds a life insurance policy (person A) or to a person associated with person A; and
    1. the life insurance policy is offered or entered into in New Zealand; and
      1. either—
        1. the loan is made because of the capacity or status of person A as a policyholder; or
          1. the interest charged on the loan depends on the capacity or status of person A as a policyholder.

          2. For the purposes of the FBT rules, the life insurer is treated as an employer and person A or the person associated with them is treated as an employee.

          3. In this section, life insurer—

          4. means a person who is the insurer under the life insurance policy:
            1. includes—
              1. a person associated with the life insurer:
                1. a person with whom the life insurer has entered into an arrangement relating to the making of the loan.

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