GB 24Exemption for genuine contracts

1. Section GB 23 does not apply if the relevant contract of employment, engagement, or partnership is a genuine contract.

2. A contract is treated as a genuine contract if—

3. the contract is in writing; and
4. the contract is signed by all the parties to it; and
5. in the case of a contract of employment or engagement, each person employed or engaged under the contract is 20 years or older on the date of signing the contract; and
6. in the case of a contract of partnership, each partner is 20 years or older on the date of signing the contract; and
7. the contract is binding for at least 3 years, except for the reasons set out in sections 69, 70, 72, and 73 of the Partnership Law Act 2019; and
8. in the case of a contract of employment or engagement, each person employed or engaged has real control over their income under the contract; and
9. in the case of a contract of partnership, each partner has—
   1. real control over their share of profits under the contract; and
   2. real liability for their share of losses under the contract; and
10. no part of the income or share of profits derived by the relative, or company of which the relative is a shareholder or director, is either a disposition without fully adequate consideration in money or money's worth passing to the person making the disposition or a disposition that any part of does not have fully adequate consideration in money or money's worth passing to the person making the disposition.

Compare

• 2004 No 35 s GD 3(4), (5)

Notes

• Section GB 24(2)(e): amended, on 21 April 2020, by section 86 of the Partnership Law Act 2019 (2019 No 53).
• Section GB 24(2)(h): replaced (with effect on 1 October 2011), on 17 July 2013, by section 58 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).