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Income Tax Act 2007

Deductions - Expenditure specific to certain entities

DV 4B: Carry forward of expenditure by member funds investing in portfolio investment entities

You could also call this:

“Carrying forward extra expenses for member funds investing in special investment funds”

When you’re part of a member fund that invests in a master fund (which is a special type of investment fund called a multi-rate PIE), there are some rules about how you can handle certain expenses.

If the master fund claims a deduction for expenses that your member fund transferred to it, and your member fund has more of these expenses than it transferred, you can do something special with the leftover expenses.

You can keep these extra expenses and transfer them to the master fund in a future year. This is called carrying forward the surplus expenditure.

If you decide to carry forward these extra expenses, you can also choose to treat some or all of them as a loss balance for tax purposes in that year.

This rule helps you manage your fund’s expenses over time, especially when you have more expenses than you can use in one year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2535845.

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DV 4: Carry forward of expenditure, or

“How to handle excess expenses from your master superannuation fund”

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“Transferring expenses from investment funds to master funds”

Part D Deductions
Expenditure specific to certain entities

DV 4BCarry forward of expenditure by member funds investing in portfolio investment entities

  1. This section applies when—

  2. a master fund that is a multi-rate PIE has a deduction under section DV 2(8B) for an income year for expenditure transferred to it by a member fund; and
    1. the amount of the expenditure that meets the tests set out in section DV 2(2) is more than the amount transferred for the income year, so there is surplus expenditure for the member fund.

      1. The member fund may carry forward the surplus expenditure for transfer under section DV 2(8B) in a later income year.

      2. If the member fund carries forward surplus expenditure in an income year, the member fund may treat some or all of the expenditure as a loss balance for the corresponding tax year.

      Notes
      • Section DV 4B: substituted, on (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).