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Income Tax Act 2007

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

YB 12: Partnership and partner

You could also call this:

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

In a partnership, you and your partners are considered connected to each other. This means the law sees you as associated persons.

If you’re a limited partner, though, things are a bit different. You’re only seen as connected to the limited partnership if you own 25% or more of any part of it. This could be rights, responsibilities, property, or anything else related to the partnership.

When figuring out if you own 25% or more, the law also looks at what people close to you own. If someone connected to you owns part of the partnership, it’s treated as if you own it too. This includes family members, companies you’re involved with, and other people or groups you’re closely linked to.

The law lists many ways you can be connected to someone else. If you’re connected to someone in any of these ways, whatever they own in the partnership is counted as yours when working out if you reach that 25% mark.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523022.

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

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“Rules for determining association with look-through companies and their owners”

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

YB 12Partnership and partner

  1. A partnership and a partner in the partnership are associated persons.

  2. Subsection (1) does not apply if the partner is a limited partner. Instead a limited partnership and a limited partner are associated persons if the limited partner has a partnership share of 25% or more in a right, obligation, or other property, status, or thing of the limited partnership.

  3. For the purposes of subsection (2), if a person (person A) and another person (person B) are associated under any of sections YB 2 to YB 11 and YB 14, person A is treated as holding anything held by person B.

  4. For the purposes of subsection (2), if a person (person A) and another person (person B) are associated under any of sections YB 2, YB 3, YB 4(1)(b) and (2) to (4), YB 7, YB 8, YB 10, YB 11, and YB 14, person A is treated as holding anything held by person B.

Notes
  • Section YB 12: substituted, on , by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).