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YA 5: General rule: capacity of trustees
or “Trustees act in a separate role from their other responsibilities”
You could also call this:

“This subpart explains how people or groups are connected for tax purposes”

This part of the law explains when two people or groups are considered to be connected or ‘associated’ for tax purposes. It tells you how to figure out if people are associated and how to treat nominees.

If the law says two people are associated, it means they’re linked in some way that matters for taxes. The law lists different types of associations, like between two companies, or a company and a person, or between family members.

There are also rules about associations involving trusts, partnerships, and other situations. For example, it covers links between trustees and beneficiaries, or between partners in a partnership.

These association rules usually apply to the whole tax law, unless a specific part of the law says otherwise. There are a couple of special rules for certain situations, like for valuing trading stock or for some overseas income cases.

If you want to know more about a specific type of association, you can look at the section of the law that covers it. The law gives you links to find these details.

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Next up: YB 2: Two companies

or “Rules for when two companies are considered associated for tax purposes”
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Part Y Definitions and related matters
Associated persons and nominees: Table Y1: Associated person rules

YB 1What this subpart does

  1. This subpart sets out the rules that—

  2. define when 2 persons are associated persons; and
    1. determine how nominees are treated.

      1. If a rule in this subpart states that 2 persons are associated persons for 1 or more provisions in this Act, a reference in the relevant provision to persons who are associated with each other includes those persons.

      2. The tests of association are categorised as follows:

      3. two companies, see section YB 2:
        1. a company and a person other than a company, see section YB 3:
          1. two relatives, see section YB 4:
            1. a person and a trustee for a relative, see section YB 5:
              1. a trustee and a beneficiary, see section YB 6:
                1. trustees with a common settlor, see section YB 7:
                  1. a trustee and a settlor, see section YB 8:
                    1. a settlor and a beneficiary, see section YB 9:
                      1. a trustee and a person with a power of appointment or removal, see section YB 11:
                        1. a partnership and a partner, see section YB 12:
                          1. two persons who are each associated with the same third person, see section YB 14.

                            1. The sections in this subpart relating to associated persons apply for the purposes of the whole Act unless a section expressly states otherwise.

                            2. Repealed

                            3. A special rule applies for the purposes of subpart EB (Valuation of trading stock (including dealer's livestock)) to determine when a low-turnover trader is associated with a company, see section EB 13(2) (Low-turnover valuation).

                            4. A special rule applies for the purposes of section EX 3 (Control interests: total of direct, indirect, and associated person interests) to determine when a New Zealand resident is associated with a non-resident relative, see section EX 4(1) (Limits to requirement to include associated person interests).

                            5. Repealed
                            Notes
                            • Section YB 1: substituted, on , by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section YB 1(5) heading: repealed, on , pursuant to section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section YB 1(5): repealed, on , by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section YB 1(8) heading: repealed, on , pursuant to section 119 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                            • Section YB 1(8): repealed, on , by section 119 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                            • Section YB 1 list of defined terms loss attributing qualifying company: repealed, on , by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).