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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions - Definitions

EZ 43: Variable principal debt instruments

You could also call this:

“Rules for handling debt instruments with changing principal amounts on a specific date”

If you are involved with a variable principal debt instrument on the implementation date, the old financial arrangements rules treat it in a special way. They assume that you either bought or issued the instrument on that day. The price is considered to be the amount of money that would be paid to the holder if all the payments for the financial arrangement were due on that day.

This rule applies to both the person who holds the instrument and the person who issued it. It’s a way to set a starting point for how these instruments are handled under the old rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516130.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Banking and loans
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EZ 42: Post facto adjustment, or

“Adjusting tax for unusual changes in financial arrangements”

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EZ 44: Relationship with rest of Act, or

“How old financial arrangements rules work with other parts of the Act”

Part E Timing and quantifying rules
Terminating provisions: Definitions

EZ 43Variable principal debt instruments

  1. For the purposes of the old financial arrangements rules, where a person is a party to a variable principal debt instrument on the implementation date, the person is deemed to have acquired or, as the case may be, issued it on that day for a consideration equal to the amount of money that would be payable to the holder on that day if the amount or amounts payable under the financial arrangement were due and payable on that day.

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