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EX 3: Control interest: total of direct, indirect, and associated person interests
or “Total control interest in a foreign company includes direct and indirect interests held by you and connected people”
You could also call this:

“Rules for counting associated persons' interests in foreign companies”

When figuring out how much control a person has over a foreign company, there are some rules about including the interests of people associated with them. You only need to consider a New Zealand resident’s non-resident relative if the New Zealand resident directly or indirectly controls part of the foreign company. This means you don’t have to include a relative’s interests if the New Zealand resident doesn’t have any control themselves.

Also, when you’re working out if a foreign company is a CFC (which stands for Controlled Foreign Company), you can only count each bit of control once. This is true even if more than one associated person has that same bit of control. This rule helps to make sure that control isn’t counted multiple times when working out if a company is a CFC.

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Next up: EX 5: Direct control interests

or “Ownership or control of shares, decisions, income, or assets in a foreign company”
Next

Part E Timing and quantifying rules
Controlled foreign company and foreign investment fund rules: Calculation of person’s control interest

EX 4Limits to requirement to include associated person interests

  1. For the purposes of section EX 3, a New Zealand resident is associated with a non-resident relative only if the New Zealand resident holds a direct control interest or indirect control interest in the foreign company.

  2. Despite section EX 3(1)(b) and (d), for the purposes of determining whether a foreign company is a CFC, a direct control interest or indirect control interest may be counted only once.

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