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FO 21: When amalgamating companies are parties to financial arrangements: economic groups
or “Rules for settling financial agreements when related companies merge”
You could also call this:

“Tax rules for interest on certain company loans issued before October 1986”

This section talks about how certain loans, called debentures, are treated for tax purposes. It applies to section FA 2, which is about reclassifying certain debentures.

If a company issued a debenture before 8 pm on 23 October 1986 in New Zealand, it’s called a profit-related debenture. This means the interest rate on the loan might change based on how much money the company makes or other factors.

Section FA 2(2) applies to these profit-related debentures that were issued before that specific time and date. This means there are special rules about how to handle the interest payments on these old loans.

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Next up: FZ 2: Effect of specified lease on lessor and lessee

or “How specified leases are treated for tax purposes”
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Part F Recharacterisation of certain transactions
Terminating provisions

FZ 1Treatment of interest payable under debentures issued before certain date

  1. This section applies for the purposes of section FA 2 (Recharacterisation of certain debentures).

  2. A debenture issued before 8 pm New Zealand standard time on 23 October 1986 is a profit-related debenture if the rate of interest may be determined by reference to the dividend payable by the company issuing the debenture or in any other manner.

  3. Section FA 2(2) applies to a profit-related debenture issued before 8 pm New Zealand standard time on 23 October 1986.

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Notes
  • Section FZ 1(3): amended (with effect on 1 April 2008), on , by section 236 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).