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New Zealand law explained for everyone

Income Tax Act 2007

Timing and quantifying rules - Financial arrangements rules

EW 7: Change from private or domestic purpose

You could also call this:

“Changing how you use a personal money agreement”

If you have an agreement about money that you’ve been using for personal reasons, and you stop using it for those personal reasons, this law tells you what happens next.

When you stop using the agreement for personal reasons, two things happen. First, it’s no longer considered a special type of agreement that doesn’t have to follow the usual rules. Second, it becomes a regular financial agreement that does have to follow those rules.

This change happens right away, on the same day you stop using the agreement for personal reasons. The law that explains what counts as these special agreements is in section EW 5(18) to (20).

Remember, this only applies to agreements that were originally for personal use. If you weren’t using the agreement for personal reasons in the first place, this law doesn’t affect you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515247.

Topics:
Money and consumer rights > Taxes
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EW 6: Relationship between financial arrangements and excepted financial arrangements, or

“How special financial agreements fit within larger financial arrangements”

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EW 8: Election to treat certain excepted financial arrangements as financial arrangements, or

“Choose to treat certain financial deals as financial arrangements for tax purposes”

Part E Timing and quantifying rules
Financial arrangements rules

EW 7Change from private or domestic purpose

  1. This section applies when a person who is a party to an excepted financial arrangement described in any of section EW 5(18) to (20) stops using it for a private or a domestic purpose.

  2. On and after the date on which the person stops using the excepted financial arrangement for a private or a domestic purpose,—

  3. it ceases to be an excepted financial arrangement for the person; and
    1. the person becomes a party to a financial arrangement.

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