EZ 48Definitions

1. For the purposes of the old financial arrangements rules, each of the following terms has the meaning given to it, despite any other meaning given to the term in section YA 1 for any other purpose and unless the context otherwise requires:

   acquisition price,—

   1. in relation to a financial arrangement and a holder of the financial arrangement, means an amount calculated in accordance with the following formula:
   2. in relation to a financial arrangement and an issuer of the financial arrangement, means an amount calculated in accordance with the following formula:

   agreement for the sale and purchase of property, in relation to a person, means a financial arrangement that is an agreement (whether conditional or unconditional) entered into by the person to purchase or otherwise acquire or sell or otherwise dispose of property; but does not include an option, a specified option, or a futures contract

   amount of all consideration, in the definition of core acquisition price, in relation to a person and to an agreement for the sale and purchase of property or a specified option, where all or part of the consideration provided to the holder is property, means the aggregate of the amount calculated in respect of that property in the manner provided in subparagraph (i) or (ii) of item w in paragraph (c) of the definition of core acquisition price and any consideration provided to the holder in relation to the financial arrangement, other than the property provided to the holder

   core acquisition price, in relation to a financial arrangement, means,—

   1. where section EZ 50 applies, the amount determined under that section; and
   2. where the financial arrangement is a trade credit, an amount calculated in accordance with the following formula:
   3. where the financial arrangement is an agreement for the sale and purchase of property (not being an agreement for the sale and purchase of property that has lapsed or otherwise does not proceed) or a specified option (not being a specified option that has lapsed or otherwise does not proceed), an amount calculated in accordance with the following formula:
   4. where the financial arrangement is a hire purchase agreement and the holder is the first holder in relation to the hire purchase agreement, either—
      1. an amount calculated in accordance with the following formula:
      2. if subparagraph (i) is not applicable, or if either the holder or the issuer in relation to the hire purchase agreement applies to the Commissioner for a specific determination, an amount calculated in accordance with the following formula:
   5. where none of paragraphs (a) to (d) applies to a financial arrangement,—
      1. in relation to a holder of the financial arrangement, the value of all consideration provided by the holder in relation to the financial arrangement; or
      2. in relation to an issuer of the financial arrangement, the value of all consideration provided to the issuer in relation to the financial arrangement

   excepted financial arrangement, other than an arrangement listed in paragraphs (p), (q), (r), (s), (t), (u), and (v) that a taxpayer has treated as a financial arrangement in a return of income already filed, means any of the following arrangements

   1. an annuity for a term contingent upon human life or an annuity for a term not contingent on human life to which section EY 8(2)(c) applies:
   2. an insurance contract or membership of a superannuation scheme:
   3. a debenture to which section FA 2 applies:
   4. a short term trade credit, unless the purchaser or vendor has elected in accordance with section EZ 46 to treat the short term trade credit as a financial arrangement to which the old financial arrangements rules apply:
   5. a specified preference share to which section FZ 1 of the Income Tax Act 2004 applies:
   6. in relation to a holder or an issuer, shares, other than withdrawable shares, or an option to buy shares, other than withdrawable shares, where those shares were or that option was acquired or issued by the person before 8.00 pm New Zealand Standard Time on 18 June 1987:
   7. in relation to a holder or an issuer, shares, other than withdrawable shares, or an option to acquire or to sell or otherwise dispose of shares, other than withdrawable shares, where those shares were or that option was acquired or issued by the person after 8.00 pm New Zealand Standard Time on 18 June 1987:
   8. a lease:
   9. a bet on any—
      1. race, as defined in section 5(1) of the Racing Industry Act 2020; or
      2. sporting event under a sports-betting system administered under Part 4 of the Racing Industry Act 2020; or
      3. gambling, including a New Zealand lottery, as those terms are defined in section 4(1) of the Gambling Act 2003:
   10. in relation to an issuer or a holder, an option to acquire or to sell or otherwise dispose of property (other than an interest in a financial arrangement) where the option was issued or acquired by the person after 8.00 pm New Zealand Standard Time on 18 June 1987 for private or domestic purposes only:
   11. a short term agreement for the sale and purchase of property:
   12. a short term option:
   13. a private or domestic agreement for the sale and purchase of property:
   14. a farm-out arrangement:
   15. a hire purchase agreement, as defined in section YA 1, but including an agreement that would be a hire purchase agreement but for the exclusion in paragraph (f) of the definition of that term, entered into before 1 April 1993, or any assignment of such an agreement:
   16. a loan that is interest free, repayable on demand, and denominated in New Zealand dollars, for the lender of the loan only:
   17. an employment contract:
   18. an interest in a group investment fund:
   19. an interest in a partnership or a joint venture:
   20. travellers’ cheques:
   21. a warranty for goods or services:
   22. a hire purchase agreement for livestock or bloodstock entered into on or after 1 April 1993

   financial arrangement means—but does not include any excepted financial arrangement that is not part of a financial arrangement

   1. any debt or debt instrument; and
   2. any arrangement (whether or not such arrangement includes an arrangement that is a debt or debt instrument, or an excepted financial arrangement) whereby a person obtains money in consideration for a promise by any person to provide money to any person at some future time or times, or upon the occurrence or non-occurrence of some future event or events (including the giving of, or failure to give, notice); and
   3. any arrangement which is of a substantially similar nature (including, without restricting the generality of the preceding provisions of this subparagraph, sell-back and buy-back arrangements, debt defeasances, and assignments of income);—

   fixed principal financial arrangement means any financial arrangement other than a variable principal debt instrument

   forward contract, in the definitions of holder and implementation date, includes, but is not limited to, a forward contract for—but does not include an agreement for the sale and purchase of property or a specified option

   1. foreign exchange:
   2. commodities:
   3. financial arrangements:
   4. excepted financial arrangements;—

   holder—

   1. means,—and hold has a corresponding meaning; and
      1. in relation to—a person who is a vendor in relation to the financial arrangement:
         1. an agreement for the sale and purchase of property; or
         2. a forward contract or a futures contract,—
      2. in relation to an option to purchase or otherwise acquire property, a person who is a grantor of the option:
      3. in relation to an option to sell or otherwise dispose of property, a person who is a grantee of the option:
      4. in relation to a hire purchase agreement, the lessor:
      5. in relation to any other financial arrangement, a person who, if the amount or amounts payable under the financial arrangement were due and payable at that time, would be entitled to receive, or would receive a pecuniary benefit from, payment of the amount or amounts so payable or any part of them;—
   2. is further defined in section EZ 38(8) for the purposes of that section

   implementation date means,—

   1. in the case of—8.00 pm New Zealand Standard Time on 23 October 1986; and
      1. forward or future contracts, including, but not limited to, contracts for—
         1. foreign exchange:
         2. commodities:
         3. financial arrangements:
         4. excepted financial arrangements; and
      2. futures contracts; and
      3. trade credits; and
      4. annuities; and
      5. agreements for the sale and purchase of property; and
      6. convertible notes,—
   2. in the case of debt defeasances and assignments of income, 20 December 1986; and
   3. in the case of variable principal debt instruments, 1 April 1987; and
   4. in the case of a financial arrangement under which—1 April 1987; and
      1. the monetary obligations of the parties are expressed in New Zealand currency; and
      2. it is contemplated that the holder may, upon demand or call, require the return of sums advanced to the issuer; and
      3. it is not contemplated that the holder may advance further sums to the issuer upon demand or call under the financial arrangement,—
   5. in every other case, 8.30 pm New Zealand Standard Time on 31 July 1986

   issuer,—

   1. in relation to a financial arrangement at any time, means a person who is a party to the financial arrangement and is not a holder in relation to the financial arrangement; and
   2. is further defined in section EZ 38(8) for the purposes of that section

   maturity, in relation to a financial arrangement, means the date on which the last payment contingent upon the financial arrangement is made, and matures has a corresponding meaning:provided that where a financial arrangement has not matured and where the amount which has not been paid is immaterial and the financial arrangement has been structured to avoid the application of section EZ 38, the financial arrangement is deemed to have matured

   money, in paragraph (b) of the definition of financial arrangement and in the definition of security payment, includes money’s worth, whether or not convertible into money, and the right to money, including the deferral or cancellation of any obligation to pay money whether in whole or in part

   private or domestic agreement for the sale and purchase of property, in the definition of excepted financial arrangement, in relation to any person, means an agreement for the sale and purchase of property or a specified option where—

   1. the agreement was entered into by that person or the specified option was granted to or by that person for private or domestic purposes; and
   2. the subject-matter of the agreement or specified option is—
      1. real property, the purchase price of which is less than $750,000; or
      2. any other property, the purchase price of which is less than $250,000; and
   3. settlement is required to take place within 365 days after the day on which the agreement was entered into or the specified option granted

   property,—

   1. in the definition of specified base cost for 1983 income year property and in the life insurance rules, includes any real or personal property; and
   2. in paragraph (a) of the definition of holder and paragraph (c) of the definition of lease and in the definitions of agreement for the sale and purchase of property, amount of all consideration, core acquisition price, excepted financial arrangement, private or domestic agreement for the sale and purchase of property, right in the specified property, short term agreement for the sale and purchase of property, short term option, and specified option, means—
      1. any capital asset that is not foreign exchange or a financial arrangement; and
      2. trading stock; and
      3. consumable aids; and
      4. property to be purchased or otherwise acquired or sold or otherwise disposed of for private or domestic purposes only

   right in the specified property, in the definition of core acquisition price, means—provided that the mere right to enforce any agreement for the sale and purchase of property or any specified option does not of itself constitute a right in the specified property

   1. the right to possession of the property; or
   2. the right to any income or the right to control or influence the disposition of income derived from the property; or
   3. the right, directly or indirectly, to exercise, or to influence any other person in the exercise of, any decision-making in respect of the property; or
   4. any other right of a substantially similar nature:

   secured arrangement, in the definitions of security arrangement and security payment, means an arrangement against which the failure to perform is secured by a financial arrangement

   security arrangement, in the definition of security payment, means a financial arrangement that secures the holder against failure of any person to perform their obligations under a secured arrangement

   security payment means money received by the holder of a security arrangement to the extent that the money is received in relation to a loss incurred due to the failure of performance of the secured arrangement and the value of the money is income of the holder

   short term agreement for the sale and purchase of property means an agreement for the sale and purchase of property where—

   1. the property is real property and settlement is required to take place within 93 days of the day on which the agreement was entered into; or
   2. the property is not real property and settlement is required to take place within 63 days of the day on which the agreement was entered into

   short-term option, in the definition of excepted financial arrangement, means a specified option where—

   1. the subject-matter of the option is real property and settlement is required to take place within 93 days of the day on which the option was granted; or
   2. the subject-matter of the option is not real property and settlement is required to take place within 63 days of the day on which the option was granted

   short term trade credit, in the definitions of core acquisition price, excepted financial arrangement, and trade credit, means any debt for goods or services where payment is required by the vendor—

   1. within 63 days after the supply of the goods or services; or
   2. because the supply of the goods or services is continuous and the vendor renders periodic invoices for the goods or services, within 63 days after the date of an invoice rendered for those goods or services

   social assistance suspensory loan is defined in section EZ 38(8)(c) for the purposes of that section

   specified option means an option to purchase or otherwise acquire or sell or otherwise dispose of property, and the agreement for the sale and purchase of property, if any, entered into as a result of the exercise of the option is deemed to be part of the option

   trade credit, in the definitions of core acquisition price and implementation date, means any debt for goods or services, but does not include a short term trade credit

   trading stock, in paragraph (b) of the definition of property, means—but does not include any financial arrangement

   1. any thing acquired for the purposes of manufacture, sale, or exchange:
   2. livestock:
   3. any other real or personal property where the business of the person by whom it is sold or disposed of comprises dealing in such property or the property was acquired by the person for the purpose of sale or other disposal:
   4. any land, any amount derived from the sale or other disposal of which would be income to which any of sections CB 6 to CB 23 applies:
   5. anything in respect of which expenditure is incurred and which, if possession were taken, would fall within any of paragraphs (a) to (d);—

   variable principal debt instrument means a bank deposit account or other financial arrangement where it is contemplated that the holder may—in either case upon demand or call, and where all such sums form part of that bank deposit account or other instrument.

   1. advance further sums to the issuer; or
   2. where the rights and obligations of the person under the financial arrangement are expressed in a currency other than New Zealand currency, require the return of sums advanced to the issuer—

Compare

• 2004 No 35 s EZ 45

Notes

• Section EZ 48 excepted financial arrangement paragraph (i)(i): amended, on 1 August 2020, by section 129 of the Racing Industry Act 2020 (2020 No 28).
• Section EZ 48 excepted financial arrangement paragraph (i)(ii): amended, on 1 August 2020, by section 129 of the Racing Industry Act 2020 (2020 No 28).