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Income Tax Act 2007

Taxation of certain entities - Qualifying companies (QC)

HA 32: Revocation of shareholders’ elections: by notice

You could also call this:

“How shareholders can cancel their company election”

If you are a shareholder in a company and you have made an election under section HA 5, you can change your mind and cancel this election. To do this, you need to tell both the company and the Commissioner of Inland Revenue.

When you tell them, you can choose a future income year for the cancellation to start. If you don’t choose a year, it will start in the income year when the Commissioner gets your notice.

The change in your effective interest in the company, as defined in section HA 43 and measured under section HA 44, will happen either when both the company and the Commissioner have gotten your notice, or on a later date if you say so in your notice.

It’s important to know that sections HA 11(6) and HA 34 to HA 37 have rules that can overrule this section, so you should check those too.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517212.

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HA 31: Revocation of directors’ elections, or

“How directors can cancel their previous company election”

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HA 33: Revocation of shareholders’ elections: by event, or

“When a shareholder's election can be automatically cancelled”

Part H Taxation of certain entities
Qualifying companies (QC)

HA 32Revocation of shareholders’ elections: by notice

  1. A person who, as a shareholder in a company, has made an election under section HA 5, may revoke it by notifying both the company and the Commissioner.

  2. In the notice, the person may nominate an income year later than the year of notice as the income year in which revocation takes effect, and the revocation takes effect at the start of that income year. If no income year is nominated, it takes effect at the start of the income year in which the Commissioner receives the notice.

  3. For measuring the effective interest in the company, as defined in section HA 43 and measured under section HA 44, of the person revoking the election, the revocation takes effect—

  4. when both the company and the Commissioner have received the notice; or
    1. on a later date nominated in the notice.

      1. Sections HA 11(6) and HA 34 to HA 37 override this section.

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