Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Maori authorities - Table H1Consequences of change in entity status for purposes of Maori authority rules

HF 10: Market value calculations

You could also call this:

“How to calculate property values when an entity becomes a Maori authority again”

When a company or trust stops being a Maori authority and then becomes one again, this law explains how to handle their property. You need to pretend that the company or trust sold all its property just before becoming a Maori authority again. The price of this pretend sale is the current market value of the property.

Next, you imagine that the new Maori authority buys all this property at the same market value. This market value is used for both the company or trust and the Maori authority.

When the Maori authority gets this property, they have to figure out how much it costs them. They should use the lower of two amounts: either the market value when they got it, or the original price the company or trust paid for it. This is important for working out things like depreciation.

If you need more information about depreciation, you can look at sections EE 55 to EE 60, and EZ 22 of the law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517495.

Topics:
Money and consumer rights > Taxes
Māori affairs > Māori land
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HF 9: Treatment of companies and trusts that choose to apply this subpart, or

“How companies and trusts are treated when they choose to become or stop being a Maori authority”

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HF 11: Choosing to become Maori authority, or

“How to become a Māori authority and what happens next”

Part H Taxation of certain entities
Maori authorities: Table H1Consequences of change in entity status for purposes of Maori authority rules

HF 10Market value calculations

  1. This section applies to property of a company or a trust when the company or the trustees of the trust, having stopped being a Maori authority, reverts to being a Maori authority.

  2. The company or the trustees, as applicable, are treated as—

  3. disposing of the company’s property, or the trust’s property, immediately before becoming a Maori authority for a consideration that is the market value of the property on the date of disposal; and
    1. acquiring the property of the Maori authority for a consideration that is the market value of the property on the date of disposal referred to in paragraph (a).

      1. In subsection (2), the market value of the property is the market value for both the company, or the trustees, as applicable, and the Maori authority.

      2. Despite sections EE 55 to EE 60, and EZ 22 (which relate to depreciation), the cost to a Maori authority of property to which this section applies is the lesser of—

      3. the market value of the property on the date it was acquired; and
        1. the original cost of the property to the company or the trust.

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