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Income Tax Act 2007

Recharacterisation of certain transactions - Amalgamation of companies

FO 4: Rights and obligations of amalgamated companies

You could also call this:

“When companies merge, the new company takes on the old company's tax responsibilities and benefits”

When a company joins with another company and stops existing on its own, some important things happen. For the tax year when the companies join and all the years before that, the new combined company has to do certain things.

You need to follow the rules that the old company had to follow when it comes to taxes. You also have to pay any money the old company owed for taxes. But don’t worry, you also get to keep any good things the old company had when it comes to taxes, like special rights or powers.

These rules about joining companies are very important. They even override some other rules in a different law called the Companies Act 1993. This means that no matter what that other law says, you still have to follow these tax rules when companies join together.

These rules don’t just apply to regular companies. They also apply when building societies join together. Building societies are special organisations that help people save money and buy houses.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516785.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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“How tax rules apply when companies merge and have unpaid debts”

Part F Recharacterisation of certain transactions
Amalgamation of companies

FO 4Rights and obligations of amalgamated companies

  1. This section applies when an amalgamating company ends its existence on amalgamation.

  2. For the tax year corresponding to the income year of amalgamation and all earlier tax years, the amalgamated company, under section 225 of the Companies Act 1993, or under this section in the case of an amalgamation of building societies,—

  3. must comply with the obligations of the amalgamating company under the Inland Revenue Acts; and
    1. must meet the liabilities of the amalgamating company under the Inland Revenue Acts; and
      1. is entitled to the rights, powers, and privileges of the amalgamating company under the Inland Revenue Acts.

        1. The amalgamation rules apply despite anything to the contrary in section 225(d) of the Companies Act 1993.

        Compare
        Notes
        • Section FO 4(2): amended, on , by section 14 of the Companies Amendment Act 2013 (2013 No 111).
        • Section FO 4(2): amended (with effect on 30 September 2010), on , by section 47 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).