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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions - Definitions

EZ 52D: Base price adjustment: financial arrangements to which Determination G22 and Determination G22A applied

You could also call this:

“How to adjust prices for specific financial arrangements under new rules”

This section is about how to adjust the price of certain financial arrangements. It applies to arrangements that were previously covered by a rule called Determination G22, and are now covered by Determination G22A.

If you’re involved in one of these financial arrangements, you need to adjust the price when you’re calculating the final value. This adjustment depends on whether you’re the person who issued the arrangement or the person who holds it.

If you issued the arrangement, you need to add an extra amount to the money you’ve paid or will pay for it. If you hold the arrangement, you need to add an extra amount to the money you’ve received or will receive from it.

To calculate this extra amount, you use a simple formula: X minus Z. X is a value from Determination G22 just before the rules changed, and Z is the same value from when Determination G22 first applied.

This section doesn’t change any previous tax decisions or arguments about Determination G22. It only applies after Determination G22 has been used and Determination G22A now applies.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3282602.

Topics:
Money and consumer rights > Taxes
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Part E Timing and quantifying rules
Terminating provisions: Definitions

EZ 52DBase price adjustment: financial arrangements to which Determination G22 and Determination G22A applied

  1. This section does not alter or affect a person's tax position in relation to Determination G22 or the person's litigation of their tax position in relation to Determination G22. It does not alter or affect the Commissioner's assessment of, or litigation of, that tax position. It applies after Determination G22 has applied for a person's financial arrangement, and only if, for the financial arrangement,—

  2. section EZ 52C applied; and
    1. Determination G22A applies when the person is required to calculate a base price adjustment for the financial arrangement.

      1. For the financial arrangement, the consideration referred to in section EW 31(7) (Base price adjustment formula) is adjusted in accordance with subsections (3) to (6).

      2. If the person is the issuer of the financial arrangement, an amount calculated under subsections (5) and (6) is added to all consideration that has been paid, and all consideration that is or will be payable, by the issuer for or under the financial arrangement.

      3. If the person is a holder of the financial arrangement, an amount, referrable to the person's holding, calculated under subsections (5) and (6) is added to all consideration that has been paid, and all consideration that is or will be payable, to the holder for or under the financial arrangement.

      4. For the purposes of subsections (3) and (4) the amount is calculated using the following formula:

        X − Z.

        Where:

        • In the formula,—

        • X is, for the financial arrangement, an amount equal to the item s in Determination G22, clause 6(1), if that item were calculated in accordance with that Determination at the time immediately before the change of spreading method described in section EZ 52C(2):
          1. Z is, for the financial arrangement, an amount equal to the item s in Determination G22, clause 6(1), if that item were calculated in accordance with that Determination at the time when it first applied.

            Notes
            • Section EZ 52D: inserted, on , by section 51 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
            • Section EZ 52D list of defined terms tax position: inserted, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).