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Income Tax Act 2007

Avoidance and non-market transactions - Avoidance: specific

GB 16: FIF income or loss: arrangements for measurement day concessions

You could also call this:

“Rules for measuring foreign investment income when transferring to connected people”

This law is about how you calculate your income or loss from foreign investments. It applies when you transfer your foreign investment to someone you’re connected with, like a family member or business partner.

You and the person you transfer to might make a plan about when to measure the value of the investment. This could be done every three months. The law says if your plan tries to avoid paying the right amount of tax, the tax office can step in.

If the tax office thinks your plan is trying to get around the rules, they can decide to treat your choice about measuring as if you made a different choice. They’ll do this to make sure you’re following the spirit of the international tax rules.

Remember, the tax office is looking out for any arrangements that might be trying to avoid paying the correct amount of tax on foreign investments.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516937.

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Part G Avoidance and non-market transactions
Avoidance: specific

GB 16FIF income or loss: arrangements for measurement day concessions

  1. This section applies when—

  2. an attributing interest in a foreign investment fund (FIF) is transferred by a person to an associated person; and
    1. the associated persons make an arrangement for making or not making—
      1. an election under section EX 26(3) (Use of quarterly measurement); or
          1. a combination of those elections; and
          2. the arrangement has an effect of defeating the intent and application of the international tax rules.

            1. The Commissioner may treat an election as having been made or not made, as applicable, to the extent appropriate to prevent the effect of the arrangement.

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            Notes
            • Section GB 16(1)(b)(ii): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 69(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).