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Income Tax Act 2007

Recharacterisation of certain transactions - Distribution, transmission, and gifts of property

FC 3: Property transferred to spouse, civil union partner, or de facto partner

You could also call this:

“Property given to partners after someone dies”

When someone dies and leaves property to their spouse, civil union partner, or de facto partner, this law explains how that property is treated.

The law applies when property is transferred after a person’s death to their surviving partner. However, it doesn’t apply if the property is tax-base property and someone who isn’t a close relative of the deceased person is entitled to other tax-base property under the will or if there’s no will.

If this law applies, the transfer of property to the surviving partner (including any transfers to an executor or administrator first) is treated as if it were a transfer of relationship property under subpart FB.

There’s a special rule for transfers of residential land, which is covered in Section FC 9.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516383.

Topics:
Family and relationships > Marriage and partnerships
Money and consumer rights > Taxes
Housing and property > Buying and selling homes
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“Rules for property left to family or tax-exempt groups after someone dies”

Part F Recharacterisation of certain transactions
Distribution, transmission, and gifts of property

FC 3Property transferred to spouse, civil union partner, or de facto partner

  1. This section applies in the circumstances described in section FC 1(1)(a) or (b) when property is transferred on a person’s death to the surviving spouse, civil union partner, or de facto partner of the deceased person. However, this section does not apply if—

  2. the property is tax-base property; and
    1. a person who is not a close relative of the deceased person is beneficially entitled under the will or intestacy to other property that is tax-base property.

      1. The transfer of property to the surviving spouse, civil union partner, or de facto partner of the deceased person, including any intervening transfer to an executor or administrator, is treated as a transfer of property under a settlement of relationship property under subpart FB (Transfers of relationship property).

      2. Section FC 9 overrides this section for certain transfers of residential land.

      Compare
      Notes
      • Section FC 3(3) heading: inserted (with effect on 1 October 2015 and applying to a person’s disposal of residential land if the date that the person first acquires an estate or interest in the residential land is on or after that date), on , by section 13(1) of the Taxation (Bright-line Test for Residential Land) Act 2015 (2015 No 111).
      • Section FC 3(3): inserted (with effect on 1 October 2015 and applying to a person’s disposal of residential land if the date that the person first acquires an estate or interest in the residential land is on or after that date), on , by section 13(1) of the Taxation (Bright-line Test for Residential Land) Act 2015 (2015 No 111).
      • Section FC 3 list of defined terms property: inserted, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
      • Section FC 3 list of defined terms residential land: inserted (with effect on 1 October 2015), on , by section 13(2) of the Taxation (Bright-line Test for Residential Land) Act 2015 (2015 No 111).