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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Expenditure related to use of certain assets

DG 6: Associated persons: company rule modified

You could also call this:

“When company ownership lets you use company assets”

For this part of the law, you need to know about when a company and a person are considered to be connected. Usually, there are rules about this in another part of the law called section YB 3(1). But for this specific section, those rules are changed a bit.

Here, a company and a person who isn’t a company are considered to be connected if the person’s share in the company lets them use an asset. This means if you own part of a company and that ownership gives you the right to use something the company owns, you and the company are seen as connected.

This rule is important because it affects how certain deductions are treated in your taxes. It’s a special rule that applies just for this part of the tax law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM5494517.

Topics:
Money and consumer rights > Taxes
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Part D Deductions
Expenditure related to use of certain assets

DG 6Associated persons: company rule modified

  1. Despite section YB 3(1) (Company and person other than company), for the purposes of this subpart, a company and a person other than a company are associated persons if—

    1. the person's share in the company gives them a right to use the asset.

      Notes
      • Section DG 6: inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on , by section 30(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
      • Section DG 6: amended (with effect on 1 April 2013), on , by section 53(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
      • Section DG 6(a): repealed (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on , by section 53(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
      • Section DG 6 list of defined terms voting interest: repealed (with effect on 1 April 2013), on , by section 53(3) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).