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Income Tax Act 2007

Definitions and related matters - Associated persons and nominees - Table Y1: Associated person rules

YB 1: What this subpart does

You could also call this:

"How to know if two people are associated under the law"

This part of the law tells you how to work out if two people are associated. It defines when two people are associated and how nominees are treated. You can find more information about associated persons in sections like section YB 2, section YB 3, and section YB 4.

The law has special rules for certain situations, like when a low-turnover trader is associated with a company, which is explained in section EB 13(2). There are also rules for when a New Zealand resident is associated with a non-resident relative, which is explained in section EX 4(1). These rules help you understand how associated persons are treated in the law.

The rules in this part of the law apply to the whole Act, unless a specific section says otherwise. You can find more details about associated persons in other sections of the law, such as section YB 11 and section YB 12.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1522999.

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YB 2: Two companies, or

"When two companies have the same owners or are controlled by the same people, they are called 'associated companies'"

Part YDefinitions 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. a look-through company and a holder of an interest, see section YB 13:
                            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(3)(jb): inserted (with effect on 1 April 2011), on , by section 135(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                              • 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 look-through company: inserted, on , by section 135(2)(a) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                              • 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).
                              • Section YB 1 list of defined terms partner: inserted, on , by section 135(2)(a) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                              • Section YB 1 list of defined terms partnership: inserted, on , by section 135(2)(a) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                              • Section YB 1 list of defined terms shareholder: repealed, on , by section 135(2)(b) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                              • Section YB 1 list of defined terms supplementary dividend holding company: repealed, on , by section 135(2)(b) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).