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Income Tax Act 2007

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

FM 42: When company liquidated

You could also call this:

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

If a company in a consolidated group is liquidated, you need to know two important things:

  1. The company doesn’t leave the consolidated group at the start of the income year when it’s liquidated. This is different from the usual rules in sections FM 39 and FM 40.

  2. You don’t need to prepare part-year financial statements for the company. This is an exception to the rule in section FM 40(4)(b).

These special rules apply only when a company is liquidated, which means it has officially ended its business and closed down.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516742.

Topics:
Money and consumer rights > Taxes
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Part F Recharacterisation of certain transactions
Consolidated groups of companies: When membership starts and stops

FM 42When company liquidated

  1. If a company is no longer part of a consolidated group because it has been liquidated,—

  2. the company is not treated as leaving the consolidated group from the start of the income year of the liquidation under sections FM 39 and FM 40:
    1. part-year financial statements are not required under section FM 40(4)(b).

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