Income Tax Act 2007

Timing and quantifying rules - Environmental restoration accounts

EK 19: Environmental restoration account of amalgamating company

You could also call this:

“Transfer of environmental restoration funds when companies merge”

When a company joins with another company, it’s called an amalgamation. If a company that has an environmental restoration account joins with another company, some special rules apply. These rules help make sure that the money set aside for environmental restoration is still available after the companies join together.

The money in the environmental restoration account of the company that’s joining with another company (called the amalgamating company) is moved to the environmental restoration account of the new combined company (called the amalgamated company). This happens on the day the companies join together.

After the companies join, the new combined company is treated as if it did all the things the original company did with its environmental restoration account. This means:

  1. Any money the original company put into its environmental restoration account is treated as if the new combined company put that money in.

  2. Any money the original company took out of its environmental restoration account is treated as if the new combined company took that money out.

  3. Any money the original company got back from its environmental restoration account is treated as if the new combined company got that money back.

These rules make sure that the environmental restoration account continues smoothly even when companies join together.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515208.

Topics:
Environment and resources > Conservation
Business > Industry rules

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EK 18: Payments from which refunds come, or

“How refunds from your environmental restoration account are processed”


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EK 20: Environmental restoration account of consolidated group company, or

“Environmental restoration savings for companies in a group”

Part E Timing and quantifying rules
Environmental restoration accounts

EK 19Environmental restoration account of amalgamating company

  1. If an amalgamating company with an environmental restoration account ends its existence on an amalgamation during an income year,—

  2. the contents of the environmental restoration account of the amalgamating company are transferred to an environmental restoration account of the amalgamated company on the date of the amalgamation:
    1. the amalgamated company is treated as having—
      1. made to the amalgamated company’s environmental restoration account the payments that the amalgamating company made before the amalgamation to the amalgamating company’s environmental restoration account; and
        1. made from the amalgamated company’s environmental restoration account the transfers that the amalgamating company made before the amalgamation from the amalgamating company’s environmental restoration account; and
          1. received from the amalgamated company’s environmental restoration account the refunds that the amalgamating company received before the amalgamation from the amalgamating company’s environmental restoration account.
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