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Income Tax Act 2007

Taxation of certain entities - Other entities

HR 9: Debt funding special purpose vehicles are transparent if election made by originator

You could also call this:

"A company is seen as doing what a special vehicle does if they choose to, for tax purposes."

Illustration for Income Tax Act 2007

You need to know about debt funding special purpose vehicles. They are transparent if the originator makes an election. This means the originator is treated as doing things the vehicle does, if it relates to assets they transferred. You are treated as holding property the vehicle holds, if you transferred it. You are also treated as being part of an arrangement the vehicle is part of, if you transferred it or it relates to your assets. The originator does things and gets things the vehicle does, if it is about assets they transferred. This is according to sections EW 24 to EW 25B and elections made under section HR 9BA or HZ 9. The vehicle is not treated as doing these things or holding this property. This is how it works for tax purposes, when an originator makes an election.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2575743.

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Topics:
Money and consumer rights > TaxesBusiness > Industry rules
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HR 8: Transitional residents, or

"Tax benefits for new residents returning to New Zealand after a long absence"

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HR 9BA: Elections to treat debt funding special purpose vehicles as transparent, or

"Choosing to treat a special company as transparent for tax purposes"

Part HTaxation of certain entities
Other entities

HR 9Debt funding special purpose vehicles are transparent if election made by originator

  1. For the purposes of the liabilities and obligations under an Inland Revenue Act, other than under sections EW 24 to EW 25B (which relate to consistency of use of spreading methods for financial arrangements), of an originator and the relevant debt funding special purpose vehicle, if an election has been made by any of the debt funding special purpose vehicle’s originators under section HR 9BA or HZ 9 (Elections to treat existing debt funding special purpose vehicles as transparent),—

  2. the originator is treated as carrying on an activity carried on by the debt funding special purpose vehicle, and having a status, intention, and purpose of the debt funding special purpose vehicle to the extent to which that activity, status, intention, or purpose relates to assets the originator transferred to the debt funding special purpose vehicle, and the debt funding special purpose vehicle is treated as not carrying on that activity or having that status, intention, or purpose:
    1. the originator is treated as holding property that the debt funding special purpose vehicle holds if the originator transferred that property to the debt funding special purpose vehicle, and the debt funding special purpose vehicle is treated as not holding that property:
      1. the originator is treated as being a party to any arrangement to which the debt funding special purpose vehicle is a party if the originator transferred that arrangement to the debt funding special purpose vehicle, or if that arrangement relates to assets the originator transferred to the debt funding special purpose vehicle, and the debt funding special purpose vehicle is treated as not being a party to that arrangement:
        1. the originator is treated as doing a thing and being entitled to a thing that the debt funding special purpose vehicle does or is entitled to if that thing relates to assets the originator transferred to the debt funding special purpose vehicle, and the debt funding special purpose vehicle is treated as not doing that thing or being entitled to that thing.

          Notes
          • Section HR 9: replaced, on , by section 222(1) (and see section 222(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).