Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Recharacterisation of certain transactions - Consolidated groups of companies - When membership starts and stops

FM 41: No nominated company

You could also call this:

“What happens when a consolidated group has no nominated company”

If a consolidated group doesn’t have a nominated company during a year, and no other company in the group is chosen to replace it, something important happens. All the companies in the group are treated as if they left the group at the start of that year. This rule applies unless section FM 34(5) says something different.

Remember, a nominated company is like a leader for the group. Without one, the group can’t work properly. That’s why all the companies are seen as leaving if there’s no leader and no replacement is picked.

It’s important to know that this rule starts from the beginning of the year, not from when the nominated company disappeared. This means the whole year is affected.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516740.

Topics:
Money and consumer rights > Taxes
Previous

FM 40: Losing eligibility to be part of consolidated group, or

“When a company becomes ineligible to be part of a consolidated group”

Next

FM 42: When company liquidated, or

“Rules for when a company in a consolidated group is liquidated”

Part F Recharacterisation of certain transactions
Consolidated groups of companies: When membership starts and stops

FM 41No nominated company

  1. If, during an income year, no nominated company exists for a consolidated group and no company that is part of the consolidated group is notified as a replacement under section FM 34(3), all companies in the consolidated group are treated as having left the consolidated group with effect from the start of the income year. Section FM 34(5) overrides this section.

Compare