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New Zealand law explained for everyone

Income Tax Act 2007

Recharacterisation of certain transactions - Transfers of relationship property

FB 3: Land acquired for certain purposes or under certain conditions

You could also call this:

“Land transferred in relationship property settlements”

This section talks about what happens when someone transfers land as part of settling a relationship property dispute. It applies to specific parts of the law that deal with selling land and making deductions.

If you got land for a particular reason or under certain conditions mentioned in those parts of the law, and then you transfer that land to settle a relationship property dispute, here’s what happens:

The transfer is treated as if you sold the land and the other person bought it. The price is considered to be the same as what you originally paid for the land.

The person who gets the land is treated as if they bought it on the same day you did.

If the person who gets the land decides to sell it later, there are special tax rules that apply. You can find out more about those rules in section FB 5.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516333.

Topics:
Money and consumer rights > Taxes
Housing and property > Buying and selling homes
Family and relationships > Marriage and partnerships
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“Rules for transferring residential land in relationship property settlements”

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FB 4: Land under scheme for major development or division, or

“Tax rules for transferring land in development as part of relationship property”

Part F Recharacterisation of certain transactions
Transfers of relationship property

FB 3Land acquired for certain purposes or under certain conditions

  1. This section applies for the purposes of sections CB 6 to CB 12, CB 14, CB 17, CB 20, and CB 23 (which relate to the disposal of land) and Part D (Deductions) when land was acquired for a purpose set out in or under the conditions set out in any of those sections, and the land is transferred on a settlement of relationship property.

  2. The transfer is treated as a disposal and acquisition for an amount that equals the total cost of the land to the transferor at the date of transfer.

  3. The transferee is treated as having acquired the land on the date it was acquired by the transferor.

  4. For the tax consequences if the transferee disposes of the land, see section FB 5.

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