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New Zealand law explained for everyone

Income Tax Act 2007

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

FE 39: Direct ownership interests

You could also call this:

“How to calculate your share of company ownership”

When you own part of a company, your direct ownership interest is the highest percentage of shares or rights you have in that company. To figure out your direct ownership interest, you look at different types of shares and rights you might have. These types are listed in another part of the law called [section EX 5(1)]. Even though this law talks about foreign companies, you use the same idea for any company when working out your direct ownership interest. This is important because it helps decide if a company is part of a New Zealand banking group for tax purposes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516546.

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FE 38: Measuring ownership interests in companies, or

“How to calculate your total ownership in a company”

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FE 40: Tiered ownership interests, or

“How to calculate your ownership in companies owned by other companies”

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

FE 39Direct ownership interests

  1. A person’s direct ownership interest in a company referred to in section FE 38 is equal to the highest percentage of shares or rights the person holds in the categories listed in section EX 5(1) (Direct control interests), applying the subsection as if the company were a foreign company.

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Notes
  • Section FE 39 list of defined terms control: repealed, on , by section 594 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section FE 39 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).