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Income Tax Act 2007

Recharacterisation of certain transactions - Interest apportionment on thin capitalisation - New Zealand banking group

FE 34: Identifying ultimate parent

You could also call this:

“How to determine the top-level owner of a New Zealand banking group”

When you’re trying to figure out who the ultimate parent of a New Zealand banking group is, you need to follow these rules:

For a registered bank, the ultimate parent is a company that owns 50% or more of the bank. Also, no other company can own 50% or more of this parent company. This means the ultimate parent is at the top of the ownership chain.

If you’re looking at a registered bank’s fixed establishment in New Zealand (like a branch or office), the ultimate parent is simply the registered bank itself.

When you’re working out who owns what, you need to look at the ownership interests. These are explained in more detail in sections FE 38 to FE 41 of the Income Tax Act 2007.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516535.

Topics:
Money and consumer rights > Banking and loans
Money and consumer rights > Taxes
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Part F Recharacterisation of certain transactions
Interest apportionment on thin capitalisation: New Zealand banking group

FE 34Identifying ultimate parent

  1. The ultimate parent is the company identified in subsection (2) or (3), as applicable.

  2. An ultimate parent of a registered bank is a company—

  3. that has an ownership interest in the registered bank of 50% or more; and
    1. in which no other company that has an ownership interest in the registered bank of 50% or more has an ownership interest.

      1. The ultimate parent of a registered bank’s fixed establishment in New Zealand is the registered bank.

      2. For the purposes of this section, ownership interests are determined under sections FE 38 to FE 41.

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      Notes
      • Section FE 34 list of defined terms ownership interest: inserted, on , by section 116(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).