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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 special rule applies to debt funding when someone makes a choice under the law."

Illustration for Income Tax Act 2007

You need to know about debt funding special purpose vehicles. When an originator makes an election under section HR 9BA or HZ 9, it affects the liabilities and obligations. This is for assets transferred to the special purpose vehicle or assets attributed to the originator. You are treated as carrying on the activity of the special purpose vehicle if it relates to a transferred asset or an attributed asset. You are also treated as having the status, intention, and purpose of the special purpose vehicle for these assets. You are considered to hold the property that the special purpose vehicle holds if it is a transferred asset or an attributed asset. The special purpose vehicle is not treated as carrying on the activity or having the status, intention, or purpose for these assets. It is also not treated as holding the property or being party to an arrangement for these assets. This means you are responsible for the things the special purpose vehicle does or is entitled to, if they relate to a transferred asset or an attributed asset.

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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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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

  1. 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—

  2. an asset transferred to the special purpose vehicle by the originator (the transferred asset); or
    1. an asset held by the special purpose vehicle that is attributed to the originator as described in section HR 9BAA(3) (the attributed asset).

      1. 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).

      2. For the purposes of this section, the originator is treated as—

      3. 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
        1. 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
          1. holding property that the special purpose vehicle holds if the property is a transferred asset or an attributed asset, as applicable; and
            1. 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
                1. the arrangement relates to a transferred asset or an attributed asset, as applicable; and
                2. 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.

                  1. 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 , by section 90 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).