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HF 3: Applying provisions to Maori authorities
or “How Māori authorities follow special tax rules”
You could also call this:

“Maori authority distributions explained: What counts and what doesn't”

A Maori authority distribution happens when a Maori authority gives something of value to a person because they are a member of that authority. This can include money given to a member that’s not really an investment, but more like a distribution of income.

If a Maori authority gives a taxable bonus issue to a member, that’s also considered a Maori authority distribution. However, when a Maori authority provides services to someone, that’s not counted as a distribution.

The amount of a Maori authority credit attached to a distribution is included in the distribution. If a distribution would normally be considered a dividend for a member, it’s treated as not being a dividend, except for the purposes of section CW 10.

When a Maori authority gives property to a member for free or for less than it’s worth, the distribution is the difference between the property’s market value and what the member paid. Similarly, if a Maori authority buys property from a member for more than it’s worth, the distribution is the difference between what they paid and the property’s market value.

Remember, these rules are part of New Zealand’s tax laws for certain entities, including Maori authorities.

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Next up: HF 5: Notional distributions of co-operative companies

or “Māori authority co-ops can give special credits to members”
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Part H Taxation of certain entities
Maori authorities

HF 4What constitutes a Maori authority distribution?

  1. A transfer of value from a Maori authority to a person is a Maori authority distribution if the cause of the transfer is the membership of the person in the Maori authority.

  2. A Maori authority distribution includes an amount advanced to a member by a Maori authority, to the extent to which the advance is not a genuine investment by the authority entered into but in effect a distribution of an amount that falls within sections BD 1(1) and CA 1(2) (which relate to amounts that are income).

  3. A taxable bonus issue made by a Maori authority to a member is a taxable Maori authority distribution.

  4. A Maori authority distribution does not include the provision of services to a person by a Maori authority.

  5. A Maori authority distribution includes the amount of a Maori authority credit attached to it.

  6. A Maori authority distribution that, but for this subsection, would be a dividend for a member, is treated as not being a dividend except for the purposes of section CW 10 (Dividend within New Zealand wholly-owned group).

  7. For the purposes of this section, if the transfer of value is—

  8. the disposal of property to a member without consideration, or for a consideration that is less than the market value of the property, the value of the Maori authority distribution is the amount by which the market value of the property is more than the consideration; and
    1. the acquisition of property from a member for a consideration that is more than the market value of the property, the value of the Maori authority distribution is the amount by which the market value is less than the consideration.

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