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Income Tax Act 2007

Definitions and related matters - Measurement of company ownership

YC 10: Shareholders holding less than 10% direct interests

You could also call this:

“Rules for shareholders with very small ownership in a company”

This section talks about what happens when you own a small part of a company. If you own less than 10% of a company’s shares or value, and you’re not another company that’s connected to it, something special happens. The law treats your ownership as if it’s held by an imaginary person instead of you. This imaginary person isn’t a company, it exists as long as the company you partly own exists, and it holds all the small ownership parts that this rule applies to. It doesn’t own anything else in the company. This rule is more important than the rule in section YC 4, which means it overrides that section when it applies.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523087.

Topics:
Money and consumer rights > Taxes
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YC 9: Shares or options held by trustees, or

“Rules for trustees holding company shares or options”

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YC 11: No look-through rule for companies in certain cases, or

“When a company's ownership of another company isn't traced back to its shareholders”

Part Y Definitions and related matters
Measurement of company ownership

YC 10Shareholders holding less than 10% direct interests

  1. This section applies when—

  2. a person has a direct voting interest or direct market value interest of less than 10% in a company (the issuing company), calculated before section YC 4, as modified by section YC 11, is applied; and
    1. the person is not a company that is associated with the issuing company.

      1. The person’s direct voting or market value interest is treated as held by a notional single person that—

      2. is not a company; and
        1. exists as long as the issuing company exists; and
          1. holds all interests in the issuing company to which this section applies; and
            1. holds nothing other than voting or market value interests in the company.

              1. This section overrides section YC 4.

              Compare
              Notes
              • Section YC 10(1)(a): amended, on , by section 236 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).