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Income Tax Act 2007

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

YB 11: Trustee and person with power of appointment or removal

You could also call this:

“Rules for trustees and those who can appoint or remove them”

If you are a trustee of a trust, you are considered to be associated with anyone who has the power to appoint or remove you as a trustee. This means you and that person are treated as connected in some way by the law.

However, this rule doesn’t apply if the person with the power to appoint or remove you meets all of these conditions:

They provide professional services and have this power as part of their job. They follow a professional code of conduct and can be disciplined if they break the rules. These rules are set by an approved organisation defined in section 3(1) of the Tax Administration Act 1994. They haven’t received any benefits from the trust. They are not allowed to receive any benefits from the trust.

If all these conditions are met, then you and that person are not considered to be associated.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523020.

Topics:
Money and consumer rights > Taxes
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“A settlor is someone who sets up or contributes to a trust, with some exceptions”

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“Rules for how partners and partnerships are connected for tax purposes”

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

YB 11Trustee and person with power of appointment or removal

  1. A trustee of a trust and a person who has a power of appointment or of removal of the trustee are associated persons.

  2. This section does not apply if the person—

  3. holds the power as a provider of professional services; and
    1. is subject to a professional code of conduct, and disciplinary process intended to enforce compliance with the code, of an approved organisation as that term is defined in section 3(1) of the Tax Administration Act 1994, for such providers of professional services; and
      1. has not benefited from the trust; and
        1. is not eligible to benefit from the trust.

          Notes
          • Section YB 11: substituted, on , by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section YB 11(1) heading: inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on , by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section YB 11(1): replaced (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on , by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section YB 11(2) heading: inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on , by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section YB 11(2): inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on , by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
          • Section YB 11(2)(b): replaced (with effect on 1 April 2010 and applying for the purposes of (a) provisions other than the land provisions, for the 2010–11 and later income years; (b) the land provisions other than section CB 11, for land acquired on or after 6 October 2009; (c) section CB 11, for land on which improvements are begun on or after 6 October 2009), on , by section 145(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).