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 treated as owning assets in a special vehicle if they choose to be."

When you look at debt funding special purpose vehicles for tax purposes, you treat them as transparent if the originator makes an election under section HR 9BA or HZ 9. This means the originator is linked to assets they transferred to the vehicle or assets attributed to them as described in section HR 9BAA(3).

You consider the originator as doing things the special purpose vehicle does, related to these assets. The originator is also treated as having the same status, intention, and purpose as the special purpose vehicle when it comes to these assets.

However, this rule does not apply to certain liabilities and obligations, like those under sections EW 24 to EW 25B, which are about consistency in using spreading methods for financial arrangements. In this case, you treat the special purpose vehicle as not doing the things the originator is treated as doing.

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This page was last updated on 20 May 2025

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

HR 8: Transitional residents, or

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

HR 9BAA: Meaning of originator, or

"Who is an originator: a New Zealand person or company involved with a special purpose vehicle."

Part HTaxation of certain entities
Other entities

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

This section applies for the purposes of establishing the liabilities and obligations under an Inland Revenue Act when an originator of a debt funding special purpose vehicle has made an election under section HR 9BA or HZ 9 (Elections to treat existing debt funding special purpose vehicles as transparent) in relation to—
an asset transferred to the special purpose vehicle by the originator (the transferred asset); or
an asset held by the special purpose vehicle that is attributed to the originator as described in section HR 9BAA(3) (the attributed asset).

Despite subsection (1), this section does not apply to liabilities and obligations arising under sections EW 24 to EW 25B (which relate to the consistency of use of spreading methods for financial arrangements).
For the purposes of this section, the originator is treated as—
carrying on an activity carried on by the special purpose vehicle to the extent to which the activity relates to a transferred asset or an attributed asset, as applicable; and
having a status, intention, and purpose of the special purpose vehicle to the extent to which the status, intention, or purpose relates to a transferred asset or an attributed asset, as applicable; and
holding property that the special purpose vehicle holds if the property is a transferred asset or an attributed asset, as applicable; and
being a party to an arrangement to which the special purpose vehicle is party if—
1. the arrangement is a transferred asset or an attributed asset, as applicable; or
2. the arrangement relates to a transferred asset or an attributed asset, as applicable; and
doing a thing and being entitled to a thing that the special purpose vehicle does or is entitled to if the thing relates to a transferred asset or an attributed asset, as applicable.

For the purposes of this section, the special purpose vehicle is treated as not carrying on the activity, not having the status, intention, or purpose, not holding the property, not being party to the arrangement, and not doing the thing or being entitled to the thing.

Notes

Section HR 9: replaced, on 30 March 2025, by section 90 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).