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Income Tax Act 2007

Income - Terminating provisions

CZ 21: Superannuation fund loans made to members before 1 April 1989

You could also call this:

“Rules for superannuation fund loans to members made before April 1989”

This law applies to loans made by superannuation funds to their members before 1 April 1989. It’s important for understanding section CS 18, which talks about how loans are treated as fund income.

For this law to apply, two things must be true:

  1. The loan was made before 1 April 1989.
  2. The interest rate on the loan can’t be changed.

The law sets rules for what interest rate should be used:

If the loan was made before 1 April 1985, you use the non-concessionary interest rate from the tax year when everyone agreed to the loan. This applies whether the agreement was written down or just agreed to verbally.

For loans made after 1 April 1985 but before 1 April 1989, you use the prescribed interest rate from the quarter when everyone agreed to the loan. Again, this applies whether the agreement was written or verbal.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513549.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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Part C Income
Terminating provisions

CZ 21Superannuation fund loans made to members before 1 April 1989

  1. This section applies for the purposes of section CS 18 (Value of loan treated as fund income) in the case of a loan made by a superannuation fund to a member if—

  2. it was made before 1 April 1989; and
    1. the rate of interest payable on the loan cannot be reviewed.

      1. The prescribed rate of interest is treated as being—

      2. the non-concessionary rate of interest for the tax year in which the loan agreement was signed or, if not in writing, agreed to by all parties, in the case of a loan made before 1 April 1985:
        1. the prescribed rate of interest for the quarter in which the loan agreement was signed or, if not in writing, agreed to by all parties, in any other case.

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