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Income Tax Act 2007

Taxation of certain entities - Portfolio investment entities - Requirements

HM 16: Associates combined

You could also call this:

“Counting connected investors as one for group ownership calculations”

When you’re looking at how many investors are in a group, sometimes you need to think about people who are connected to each other. If someone is connected to an investor, and both of them own at least 5% of the group, you should count them as one person instead of two. This helps to make sure that big groups of connected people don’t end up controlling too much of the investment. However, there’s another rule in section HM 21(5) that can change how this works, so you need to check that too.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2888737.

Topics:
Money and consumer rights > Taxes
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HM 15: Maximum investor interests, or

“Limit on how much you can invest in a fund class”

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HM 17: Same rights to all investment proceeds, or

“Everyone gets equal rights to investment returns in a PIE”

Part H Taxation of certain entities
Portfolio investment entities: Requirements

HM 16Associates combined

  1. For the purposes of sections HM 14 and HM 15, if a person is associated with an investor, the person and the investor are treated as 1 person, but only if both the person and the investor hold an investor interest of 5% or more. Section HM 21(5) overrides this section.

Compare
  • s HL 9(6)
Notes
  • Section HM 16: inserted, on (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).