Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 10B: Interest or expenditure connected to stapled debt security

You could also call this:

“Companies can't claim deductions for costs related to stapled debt securities”

When a company issues a special type of debt called a stapled debt security, they can’t claim certain costs as deductions while section FA 2B(2) applies to the security. You can’t deduct the interest you have to pay on the security. You also can’t deduct any costs or losses related to the security or from borrowing the money that’s secured by or owed under the security.

This rule is stronger than what’s written in sections DB 5 to DB 8. It also overrides the general permission that usually allows deductions.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2533722.

Topics:
Money and consumer rights > Taxes
Previous

DB 10: Interest or expenditure connected to profit-related debentures, or

“Rules for companies that can't claim expenses related to profit-linked loans”

Next

DB 11: Negative base price adjustment, or

“Calculating tax deductions for financial arrangements with negative outcomes”

Part D Deductions
Specific rules for expenditure types

DB 10BInterest or expenditure connected to stapled debt security

  1. A company that issues a stapled debt security is denied, while section FA 2B(2) (Stapled debt securities) applies to the security, a deduction for—

  2. interest payable under the security:
    1. expenditure or loss incurred in connection with the security:
      1. expenditure or loss incurred in borrowing the money secured by or owing under the security.

        1. This section overrides sections DB 5 to DB 8.

        2. This section overrides the general permission.

        Notes
        • Section DB 10B: inserted (with effect on 1 April 2008), on , by section 72 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).