Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Income from holding property (excluding equity)

CC 8B: Certain commercial bills: non-resident holders

You could also call this:

“Tax rules for non-New Zealanders holding certain commercial bills”

If you’re not from New Zealand and you own a special type of document called a commercial bill, this law might apply to you. It’s important to know that this only affects you if you don’t have to follow certain financial rules because of other laws.

There are two situations where this law matters:

  1. If you sell the commercial bill to someone else instead of waiting for it to be paid back.
  2. If you get the commercial bill paid back by someone who is connected to you in some way.

In both these cases, the money you get is counted as income. This means you might have to pay tax on it.

If you sell the commercial bill, the value of the bill on the day you sell it is considered your income.

If you get the commercial bill paid back by someone connected to you, the amount you receive is considered your income.

Remember, this law is quite specific and only applies in certain situations. If you’re unsure, it’s always best to ask for help from someone who knows about tax laws.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2536615.

Topics:
Money and consumer rights > Taxes
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Part C Income
Income from holding property (excluding equity)

CC 8BCertain commercial bills: non-resident holders

  1. This section applies when a non-resident holder of a commercial bill who is required to calculate and allocate income and expenditure under neither the financial arrangements rules nor the old financial arrangements rules because of the application of section EW 9(2) to (4) or EZ 45(e) (which relate to the application of the rules)—

  2. disposes of the commercial bill other than by redemption; or
    1. redeems a commercial bill whose issuer is an associated person of the non-resident.

      1. The value of the commercial bill on the day the non-resident holder disposes of it is income of the person.

      2. The amount that the non-resident holder receives on redemption is income of the person.

      Compare
        Notes
        • Section CC 8B: inserted (with effect on 1 April 2008), on , by section 11(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).