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FE 3: Interest apportionment for individuals
or “How interest is divided for individuals and trustees in certain tax situations”
You could also call this:

“Definitions of key financial terms used in tax law”

In this part of the law, you’ll learn about some important words and what they mean:

An excess debt entity is someone who meets certain requirements in a year, is not a reporting bank for a New Zealand banking group at any time in that year, and is not a natural person.

An excess debt outbound company is an excess debt entity that meets specific requirements but not others.

A linked trustee is someone you’ve given money to under an agreement.

A natural person who meets certain requirements in a year is considered a natural person for that year.

A reporting bank for a New Zealand banking group is someone who meets specific requirements and is chosen according to section FE 37.

These definitions help explain important terms used in the law about how certain financial transactions are treated for tax purposes.

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Next up: FE 4B: Meaning of public project asset, public project debt, and public project participant debt

or “Explaining key terms for public project funding and assets”
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Part F Recharacterisation of certain transactions
Interest apportionment on thin capitalisation

FE 4Some definitions

  1. In this subpart,—

    excess debt entity for an income year is a person who—

    1. meets the requirements of section FE 2 in the income year; and
      1. is not, at any time in the income year, a reporting bank for a New Zealand banking group, or part of a New Zealand banking group; and
        1. is not a natural person

          excess debt outbound company for an income year is an excess debt entity that meets the requirements of section FE 2(1)(e) or (f), and none of the requirements of section FE 2(1)(a) to (db)

            linked trustee, for a person, is a trustee to whom the person has provided money under a settlement or arrangement

              natural person, for an income year, is a natural person who meets the requirements of section FE 2 in the income year

                reporting bank for a New Zealand banking group is a person who—

                1. meets the requirements of section FE 2; and
                  1. is the person determined under section FE 37.

                  2. Repealed
                  Notes
                  • Section FE 4(1) heading: inserted, on , by section 108(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                  • Section FE 4(1) excess debt entity paragraph (c): amended, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section FE 4(1) excess debt outbound company: inserted (with effect on 30 June 2009), on , by section 209(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                  • Section FE 4(1) excess debt outbound company: amended (with effect on 1 April 2015), on , by section 66 of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                  • Section FE 4(1) linked trustee: inserted, on (applying for the 2015–16 and later income years), by section 108(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                  • Section FE 4(1) natural person: replaced, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section FE 4(1) non-resident owning body: repealed, on , by section 102(1) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4(1) reporting bank: substituted (with effect on 1 April 2008), on , by section 209(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                  • Section FE 4(2) heading: repealed, on , pursuant to section 102(2) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4(2): repealed, on , by section 102(2) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4 list of defined terms control interest: repealed (with effect on 1 April 2015), on , by section 172 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                  • Section FE 4 list of defined terms natural person: repealed, on , by section 102(3) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4 list of defined terms New Zealand: repealed, on , by section 102(3) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4 list of defined terms non-resident: repealed, on , by section 102(3) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4 list of defined terms non-resident owning body: repealed, on , by section 102(3) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4 list of defined terms ownership interest: repealed, on , by section 102(3) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section FE 4 list of defined terms registered bank: repealed (with effect on 1 April 2008), on , by section 209(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                  • Section FE 4 list of defined terms widely-held company: repealed, on , by section 102(3) (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).