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Income Tax Act 2007

Timing and quantifying rules - Financial arrangements rules - Consideration when anti-avoidance provision applies

EW 48: Anti-avoidance provisions

You could also call this:

“Rules to prevent unfair tax avoidance when calculating financial amounts”

This part of the law talks about how to figure out the amount of money involved in certain financial situations. It applies when you need to know how much someone paid or received in cases where special rules are used. These special rules are there to stop people from avoiding taxes unfairly.

The law says that if any of these special rules apply, you need to use the amount of money that the rule says, not what might have been paid or received in real life. The special rules it mentions are:

  1. A rule about deals that go against what the financial arrangement rules are supposed to do.
  2. A rule about when someone pays too much money.
  3. A rule about when someone receives too little money.
  4. Rules about how to split up the price when buying or selling things.

If you want to know more about these special rules, you can look them up in other parts of the law that are mentioned.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515354.

Topics:
Money and consumer rights > Taxes
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“Rules for calculating tax when a business partnership ends or a look-through company stops operating”

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EW 49: Income and deduction when debt disposed of at discount to associate of debtor, or

“Taxation rules when debt is sold cheaply to someone connected to you”

Part E Timing and quantifying rules
Financial arrangements rules: Consideration when anti-avoidance provision applies

EW 48Anti-avoidance provisions

  1. This section applies when it is necessary to determine the consideration that is paid to or by a person in a case to which any of the following provisions applies:

  2. section GB 21 (Dealing that defeats intention of financial arrangements rules); or
    1. section GC 7 (Excess amount payable by person); or
      1. section GC 8 (Insufficient amount receivable by person); or
        1. sections GC 20 and GC 21 (which relate to purchase price allocation).

          1. The consideration is the amount determined under the relevant provision.

          Compare
          Notes
          • Section EW 48(1)(c): amended, on , by section 50(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
          • Section EW 48(1)(d): inserted, on , by section 50(2) (and see section 50(3) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).