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FE 34: Identifying ultimate parent
or “How to determine the top-level owner of a New Zealand banking group”
You could also call this:

“Who can be left out of a banking group”

You can choose to leave out some people or places from your New Zealand banking group. Here’s how:

If you’re a reporting bank, you can decide not to include certain people or places in your group. You can leave out a person or place that mainly does life insurance work.

You can also leave out someone living in New Zealand if they own all of a life insurance company that’s not in the group. But this person’s main job can’t be banking, lending money, or renting things out. They also can’t mainly own or control a company that does these things.

You can leave out a New Zealand resident if they have to be in the same group accounts as someone who’s not in the banking group because of the life insurance rule. Again, their main job can’t be banking, lending money, or renting things out. They also can’t mainly own or control a company that does these things.

Lastly, you can leave out a fixed place of business of someone who doesn’t live in New Zealand. This is only if they own all of a life insurance company that’s not in the group, and if the fixed place mainly helps pay for that life insurance company. The fixed place’s main job also can’t be banking, lending money, or renting things out. It also can’t mainly own or control a company that does these things.

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Next up: FE 36: Identifying members of New Zealand banking group in usual case

or “How banks and related entities form a New Zealand banking group”
Next

Part F Recharacterisation of certain transactions
Interest apportionment on thin capitalisation: New Zealand banking group

FE 35Persons who may be excluded from banking groups

  1. A reporting bank may determine the members of its New Zealand banking group by excluding from the group a person or fixed establishment described in subsections (2) to (5).

  2. A reporting bank may choose to exclude from its New Zealand banking group a person or a fixed establishment whose main activity is providing life insurance.

  3. A reporting bank may choose to exclude from its New Zealand banking group a person resident in New Zealand—

  4. who has a voting interest of 100% in a person excluded under subsection (2); and
    1. whose main activity is not banking, financing, or leasing, or the ownership or control of an entity whose main activity is banking, financing, or leasing.

      1. A reporting bank may choose to exclude from its New Zealand banking group a person resident in New Zealand—

      2. who is required under generally accepted accounting practice to be included in consolidated group accounts with a person or fixed establishment excluded under subsection (2) or (3); and
        1. whose main activity is not banking, financing, or leasing, or the ownership or control of an entity whose main activity is banking, financing, or leasing.

          1. A reporting bank may choose to exclude from its New Zealand banking group a fixed establishment of a non-resident if—

          2. the non-resident has a voting interest of 100% in a person excluded under subsection (2); and
            1. the fixed establishment has a main activity of financing the person excluded under subsection (2); and
              1. the main activity of the fixed establishment is not banking, financing, or leasing, or the ownership or control of an entity whose main activity is banking, financing, or leasing.

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                Notes
                • Section FE 35 list of defined terms control: repealed, on , by section 594 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).